2001 Turkish economic crisis

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Economy of Turkey
Economic history 2000s boom 2001 economic crisis Economic crisis (2018-present)
Money Turkish lira Central Bank of the Republic of Turkey
Stock exchange Istanbul Stock Exchange Companies listed on ISE
Major projects Baku–Tbilisi–Ceyhan pipeline European Union–Turkey Customs Union Nabucco pipeline Southeastern Anatolia Project Land ownership
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The 2001 Turkish economic crisis was a financial crisis which resulted in a stock market crash and collapse in the Turkish lira as a result of political and economic problems that had been wearing on Turkey for years.

Leading up to the crisis, throughout the 1980s and 1990s, Turkey relied heavily on foreign investment for economic growth, with trade above 40% of GNP.^[1] The Turkish government and banking systems lacked the financial means to support meaningful economic growth. The government was already running enormous budget deficits, and one of the ways it managed to sustain these was by selling huge quantities of high-interest bonds to Turkish banks. Continuing inflation (likely a result of the enormous flow of foreign capital into Turkey) meant that the government could avoid defaulting on the bonds in the short term. As a consequence, Turkish banks came to rely on these high-yield bonds as a primary investment.^[2]