Question

For years, Swiss Franc is over-valued and Turkish lira is undervalued and both countries are not happy with this. Why?

Answer 1

This is the case because Switzerland is a net exporter ad Turkey is a net importer.

Now, when a country's currency is over values, it hurts the competitiveness of its products in the international goods market. Thus, exports would fall. This is problematic for a net exporter as foreigners will find it expensive to purchase its goods and this will negatively affect the economy.

On the other hand, a net importer spends more on the goods from the rest of the world than the rest of the world spends on its goods. Thus, if the currency is under valued, it has to pay more for its imports and thus the imports become more expensive and add to the deficit.