Bosnia’s Central Bank said they see no cause for concern over the drop in the value of the Turkish Lira (TRY), the Bank said.

Considering the system’s financial stability, the Central Bank of Bosnia and Herzegovina (CBBH) sees no cause for concern at this moment. Due to its credit rating, Turkey is not one of the countries from CBBH’s investment spectre, therefore it has no direct impact on the return of investments in foreign currency reserves,” the bank said. “As Turkey is not an EU member state, nor a member of the EURO zone, we do not expect significant changes in the credit ratings of countries in which we can invest in foreign currency reserves.”

According to BBC’s report, the TRY dropped 30 percent and the Turkish stock exchange lost 17 percent recently, with a 30 percent jump in interest rates in loans in the TRY. Some Bosnian economists interpreted this as a potential danger for Bosnia, saying the crisis could reflect on the work of some European banks, indirectly affecting Bosnia’s economic stability.

CBBH also noted that they do not expect a significant impact on the nominal and real effective exchange rate.

“The EUR, and therefore the BAM, are still nominally gaining strength compared to the TRY.”

“During the first six months of Bosnia’s total foreign trade the Turkish share was only 4.6 percent and the TRY's impact on the real effective exchange rate is significantly weaker than, say, the impact of the differences in inflation between Bosnia and the eurozone or the countries of the region,” the Bank stressed.

They added that the TRY is a currency from the so-called emerging market which recorded a significant drop in value compared to the USD, from April this year. As expected, the strengthening of the USD is a potential threat for the value of currencies coming from emerging markets, especially those with a significant payment imbalance or a significant share of the USD in their total foreign debt.

The USD's overestimation (the International Monetary Fund estimated it is between 8 and 16 percent), as well as trade wars, are just some of the factors that further weakened the TRY value to USD over the past few weeks.