Governments across the world have sprung into desperate action to curb the massive economic impact of the coronavirus crisis, but the efficiency of the measures remains largely uncertain in the face of a pandemic that is upending economic, political and social conventions.

Social distancing — the primary precaution to minimize fatalities — has abruptly hit consumer demand for a wide range of goods and services worldwide, which, in turn, is forcing halts in production. With all types of corporate assets sagging, governments are resorting to cliche monetary and fiscal remedies from other times of global crisis. The impact of these measures remains uncertain.

In Turkey, where the economy was already ailing since a severe currency shock in 2018, the central bank and the government have announced similar monetary and fiscal steps, but, in a sign of mistrust in the measures, the Turkish lira has continued to nosedive and the country’s risk premium has shot up.

Written by Mustafa Sönmez