September 24, 2018

Turkey responds to US “political conspiracy”

Turkey’s central bank announced this morning a series of measures aimed at easing market concerns after the collapse of the pound, which the present Recep Tayyip Erdogan blames Washington.

In particular, the institution said it would provide all the liquidity banks need, adding that it would take “all the necessary measures” to ensure financial stability.

The announcement came as President Erdogan reaffirmed his opposition to rising interest rates and denounced a “conspiracy against Turkey.”

Turkish Finance Minister Berat Albayrak says his plan has been developed for banks and for the real economy sectors, including small and medium-sized enterprises, which are most affected by currency market fluctuations.

“From Monday morning, our institutions will take the necessary measures and we will share our announcements with the markets,” said the minister.

“All our action plan and all the measures are already ready,” he added without providing details.

At the edge of the financial crisis, the pound plunged to a record low Friday , losing up to 18% in the biggest drop since 2001.

“This is the obvious sign of an attack, a challenge,” said the Minister of Finance.

The Turkish currency hit a new low Sunday night in the Asian markets at 7.24 pounds for $ 1.

In total, the Turkish currency has lost more than 45% of its value since the beginning of the year under the effect of three factors combined: the concerns related to the influence of Erdogan on the economy, its repeated opposition to a rise in interest rates and tension in relations with the United States.

In front of his followers in Trebizond, a seaside resort on the Black Sea, Erdogan refuted on Sunday the idea that Turkey was facing a financial crisis comparable to that which affected the Asian countries there are twenty years.

He also reiterated his refusal to raise interest rates.

Interest rates are an instrument of exploitation that makes the rich richer and the poor poorer.

Recep Tayyip Erdogan, President of Turkey
“Nobody should try to make us fall into this trap. We will not be fooled by this scheme, “he said.

Erdogan, who has called himself “an enemy of interest rates,” wants cheap credit for banks to fuel growth, but investors fear overheating of the Turkish economy.

The Turkish president’s recent statements on this topic of interest rates have reinforced some people’s belief that the Turkish central bank was not free of its monetary policy.

Erdogan has called for the third day in a row his compatriots to sell dollars and euros to support the national currency.

The Turkish lira plunged nearly 20% Friday after the announcement of a doubling of tariffs on Turkish steel and aluminum imported into the United States.

Written by
Janet Van der Wiel

Janet van der Wiel is a reporter for US Updates.  After graduating from the University of Pennsylvania, Janet got an internship at a local radio station and worked as a beat reporter and producer.  Janet has also worked as a columnist for the Philadelphia Daily News. Janet covers economy and community events for US Updates.

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Written by Janet Van der Wiel

Janet Van der Wiel

Janet van der Wiel is a reporter for US Updates.  After graduating from the University of Pennsylvania, Janet got an internship at a local radio station and worked as a beat reporter and producer.  Janet has also worked as a columnist for the Philadelphia Daily News. Janet covers economy and community events for US Updates.

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