Gelisim News

Istanbul Gelisim University (IGU) Asst. Prof. Dr. Emrah Doğan commented on the coronavirus effect on world financial markets. Stating that coronavirus pandemic has caused large contraction in production and fluctuations in stock markets and foreign exchange markets, Asst. Prof. Dr. Emrah Doğan spoke: “The problems in the financial markets caused by the pandemic, which affects the whole world, have a potential disruptive effect on the real economy. This has increased the possibility of creating a new global crisis by causing disruption and instability of macroeconomic systems in all economies.”
 

Emphasizing that the Covid-19 pandemic showed its effects on financial markets with the collapse of all the world stock markets in March 2020, Doğan spoke: “For example, the Dow Jones Index dropped its lowest point of all-time decline on March 16, 2020, with a decrease of 2977 points in one day. The environment of uncertainty created by the COVID-19 pandemic on investors, especially the USA, England (37 percent fall), Germany (33 percent fall), Brazil (48 percent fall), Poland (38 percent fall) ) and Turkey (15 percent decline) has led to huge losses in the stock market value. These global losses have been tried to be balanced with the practices of central banks, especially the US Central Bank, to provide liquidity. However, it can be said that the stock markets will not reach their pre-pandemic levels for a while due to the fact that investors remain uncertain about the future.”

The outbreak also manifested itself in oil markets, Doğan said as follows:
 

“In early March 2020, while oil prices were around $50, oil prices fell to $20 as a result of low demand brought about by the pandemic. Low oil prices have made the economies of OPEC countries such as especially Russia, whose economy is mainly made up of oil, and Qatar, Azerbaijan and Saudi Arabia fragile. In this context, the fact that this process, which started with the COVID-19 outbreak, is not known when it will be controlled, means that the risk of an economic collapse based on oil prices will continue in these countries.”

Noting that the coronavirus pandemic also has the potential to become an economic pandemic, Doğan said: “Therefore, as a result of all the developments, countries should mitigate the effect of the COVID-19 pandemic with the measures they will take with the help of monetary and financial policies.” And added: “When the course of the pandemic is taken under control, it is very important for the countries to target a stable, sustainable recovery process by taking lessons from the pandemic. However, in such a situation, it seems possible to overcome the “economic pandemic” and prevent a new global crisis.”