Effect of the Devaluation of the Lira
on the EB-5 Investment from Turkey
and Other Emerging Markets
How the plummeting lira impacted the Turkish EB-5 investors
and what ripple effects it can have for EB-5 markets worldwide.
By Marko Issever
“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira,
slides rapidly downward against our very strong Dollar! Aluminum will now be 20 percent and Steel 50 percent. Our relations
with Turkey are not good at this time!”
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P
resident Trump’s Aug. 10 tweet of this year led to the
greatest currency shock of the year, as the Turkish lira
plummeted against the American dollar and other major
currencies. Prior to the announcement, up until April 27,
the currency was hovering around four lira to the dollar. By
Aug. 7, it had reached 5.23 lira to the dollar, and by the end
of the week, following Trump’s announcement, intraday
movements reported as high as 7.40 lira for one dollar. However, fixed salary employees, those who have real
assets denominated in Turkish lira, as well as those
who have dollar denominated liabilities suffer the most.
Moreover, a group of property owners who take false
comfort in having their rents linked to the dollar also
find themselves in a bind, as they too have difficulties in
collecting their rents.
Such a large and sudden move has had and will continue
to have quite an adverse impact on the buying power of
Turkish citizens living and working in Turkey. In the past,
inflation has often followed these kinds of devaluations
that has in turn made goods and services more expensive.
Generally, in these situations, those who can adjust the
price of the products and services eventually do so. IMPLICATIONS FOR
THE EB-5 INVESTOR
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EB5 INVESTORS M AGAZINE
The typical composition of the Turkish EB-5 investor is
either a medium to high-income professional, or someone
who has real estate to liquidate in order to fund the
investment. Even prior to the currency crisis, there was a