Timothy Ash's Carry Trade Analysis and Experts' Hot Money Warning: Is a Currency Crisis Risk Emerging?

Timothy Ash: Investors Pleased with Interest Rate Differentials London-based financial advisor Timothy Ash evaluated the current approach of foreign investors toward Turkey.
Ash noted that while investors trust the economic team led by Treasury and Finance Minister Mehmet Şimşek, this interest is focused on short-term "hot money" and carry trade transactions rather than long-term direct investments.
Arguing that the policy of real appreciation of the Turkish lira is the cornerstone of the disinflation process, Ash stated that the current interest rate environment offers an attractive profit gateway for foreign capital.
Prof.
Baki Demirel: Risk of Currency Attack on the Horizon Evaluating Ash's statements, Yalova University faculty member Prof.
Baki Demirel drew attention to the structural risks inherent in carry trade-oriented capital inflows.
Emphasizing that hot money attracted by high interest rates pushes the private sector toward short-term borrowing, Demirel warned that a possible shift in economic policy could trigger sudden capital outflows.
Stating that this situation could lead to a severe currency attack and crisis, Demirel expressed that in a structure where capital movements are so free, it becomes difficult to follow an independent interest rate policy and protect economic decision-making mechanisms.
Bilin Neyaptı: Turkey Has Become a Carry Trade Hub Bilkent University faculty member Assoc.
Bilin Neyaptı stated that Turkey has become the focus of global carry trade transactions because it offers one of the highest interest rates in the world.
Arguing that the main reason foreign investors are satisfied with the current economic management is the high profit opportunities provided, Neyaptı stated that this situation is not reflected in public welfare.
"Those who bring hot money are happy because of the high returns, but this model does not provide a permanent benefit to the Turkish economy." Neyaptı pointed to risks regarding the sustainability of the current economic picture, emphasizing that hot money inflows do not provide structural improvement.