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How do I illustrate the statement below using supply and demand for the Lira (in $/Lira)?
Lira. As well as increase its foreign exchange reserves; this will lead to a reduction in inflation and a stronger Turkish Lira thus, stabilizing the currency and mitigate inflation. But even with a strategic and well thought out plan it will be a difficult challenge for Turkey and the Central Bank. The confidence in the economy has all but collapsed as a result, while foreign and local investors have pulled their money out of Turkey because of the Lira's free-fall. This can also be illustrated using a supply and demand diagram, when the supply curve shifting up, it results in higher prices for the Lira.
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