Turkish President Erdogan says collapse in lira a plot against the country

14 August, 2018, 22:49 | Author: Corey Lynch
  • Turkey has plan to ease market concerns, minister says, as lira plunges again

The Turkish lira continues to rapidly depreciate in value against the USA dollar after the Trump administration announced it was doubling tariffs on Turkish steel and aluminum last week.

The Turkish central bank has pledged to take "all necessary measures" to stabilize the country's economy to make sure the banks have all the money they need.

Erdogan, who gained sweeping new powers following his re-election in June, said rumors had been spread that authorities might impose capital controls in response to the slump in the currency, which tumbled as much as 18 percent on Friday alone. Overall this year, the lira has lost more than 40 percent against the dollar.

While Asian emerging markets are relatively isolated from what's happening in Turkey, foreign investors that have bond exposure to the country may have also cut holdings in other developing nations to offset losses or hedge their position, said Maximillian Lin, an emerging-market Asia strategist at NatWest Markets in Singapore.

"After a large sell-off triggered by the rout in Turkey, some investors may have bought emerging currencies on dips", said Toru Nishihama, Tokyo-based emerging-market economist at Dai-ichi Life Research Institute Inc.

Angered by the continued detention of an American pastor, the US government imposed sanctions on two Cabinet ministers and threatened more. It stabilized Tuesday with a rise of about five percent.




Albayrak also said a plan has been prepared for banks and the real economy sector, including small to mid-sized businesses, which are most affected by the foreign exchange fluctuations.

The man at the center of Turkey's currency crisis and feud with the United States - President Recep Tayyip Erdogan - is unleashing the same combative rhetoric that powered him through other grave challenges in his 16 years as the increasingly authoritarian leader of a key North Atlantic Treaty Organisation ally.

It did not provide information on the accounts but said they aimed to "manipulate the dollar rate and form negative perceptions" concerning the Turkish economy. "What do you want to do?"

An American Christian pastor standing trial in Turkey on terrorism charges has appealed again to a Turkish court to release him from house arrest and lift his travel ban, his lawyer told Reuters on Tuesday.

"The concerns are ongoing in the market but it is possible to mention a limited optimism for the first time in a while", a foreign exchange trader said.

Turkey's influential business groups have called on the government to implement tighter monetary policy to help overcome the country's currency crisis. "This is called carrying out an operation against Turkey". Infuriated by the move, which Washington said was insufficient, Trump sanctioned two Turkish ministers and doubled tariffs on metal imports, adding to lira's slide.

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