Home » Money

Turkish Lira sell-off wreaks havoc with global currency markets

14 August, 2018, 22:45 | Author: Sara Gill
  • Turkey has plan to ease market concerns, minister says, as lira plunges again

The lira is down over 40 percent this year as investors question whether President Recep Tayyip Erdogan's government can cope with problems including a diplomatic spat with Washington that has resulted in higher USA tariffs.

Erdogan, who has called himself the "enemy of interest rates", wants cheap credit from banks to fuel growth, but investors fear the economy is overheating and could be set for a hard landing.

"If (the United States) have the iPhone, there's Samsung on the other side", he said, referring to USA giant Apple's iconic phone and the top South Korean brand.

Singling out the iPhone, he suggested Turks buy Samsung Electronics or locally made Venus Vestel smartphones instead.

The current crisis was sparked by Ankara's refusal to release pastor Andrew Brunson, who is now under house detention on terror-related charges and espionage.

"We will boycott USA electronic products", Erdogan said. The U.S. has responded by slapping financial sanctions on two ministers and later doubled steel and aluminum tariffs on Turkey.

In addition, Turkish Airlines has announced it will stop advertising American products on its flights, authorities in Ankara said. Turkey's FX reserves declined at an accelerated rate this year, due in part to the need to pay for imported oil in US Dollars, and are now below the level deemed sufficient by the International Monetary Fund in order to weather a full-blown economic crisis. "Necessary instructions on the issue have been issued to our agencies", Yahya Ustun, spokesman for the country's flag-carrier, wrote on Twitter.

Earlier on Monday, Finance Minister Berat Albayrak, who is also Erdogan's son-in-law, said Turkey would start rolling out an economic action plan on Monday.

Simon Derrick, chief currency strategist at BNY Mellon, said the central bank's measures are unlikely to be enough.

On Friday that relentless slide turned into a crash: the lira dropped as much as 18 per cent, hitting USA and European stocks as investors took fright over banks' exposure to Turkey.

Erdogan admitted the Turkish economy had problems - including a widening current account deficit and inflation of nearly 16 percent but added: "Thanks to God, our economy is functioning like clockwork".

US stocks rose in a broad rally on Tuesday after four straight days of losses on a strong set of earnings from retailers and as bank stocks rebounded after the Turkish lira snapped a three-week slide.

The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning.

Because of the currency storm and the possibility that access to materials, and to export markets will be disrupted at the Turkish plants, financial data for the performance of the companies in Turkey is now unbalanced and for the time being unreliable, reports LTN.

But to the dismay of markets, the statement gave no clear promise of rate hikes, which is what most economists say is needed. Meanwhile, Turkey's state-run media said the lawyer representing the pastor appealed to a court to lift a travel ban imposed on Brunson.

Global markets have taken two days of losses as investors anxious that Turkey's currency troubles might spread.



Nicki Minaj makes Stephen Colbert blush with seductive rap
He then asked if any of her targets had reached out to her about their roasting. "But when you see us, please don't f-ing stare". Queen is the fourth studio album by Minaj and was released on Friday by Young Money Entertainment and Cash Money Records.

Ben Stokes Has Been Punished Enough, Says Michael Vaughan
A third man, Ryan Hale, was acquitted of the charge last Thursday on the directions of the judge. Mr Stokes then allegedly knocked Mr Ali to the floor.

Singer Aretha Franklin 'gravely ill with cancer'
Showbiz 411's Roger Friedman told CNN: "She has a great family, she's surrounded by love, and the world is sending prayers". Aretha Franklin's nephew says the ailing soul legend is "alert and laughing" at home with her family.

Trump calls Omarosa a 'dog' and 'lowlife'
Manigault Newman's brief stint in the White House was not her first time around the D.C. merry-go-round. Gidley and other White House staffers are now acting shocked as well.

Hopefully one more good night to wish upon a shooting star
There is also a parade of planets visible! NASA will be streaming a view from Huntsville, Ala. live on its MeteorWatch Facebook page.

Elon Musk says Saudis back Tesla buyout
Saudi Arabia's sovereign wealth fund is in talks to increase its investment in Tesla as part of Elon Musk's buyout plan. Musk says he left a meeting with wealth fund officials July 31 with no question that the deal could be closed.

Kangana Ranaut has a message for PM-Elect Imran Khan
The two parties have made a decision to field joint candidates for posts of speaker, deputy speaker and prime minister. It is not clear if they will attend the ceremony scheduled to take place on 18 August in the President House.

Look up this weekend for annual meteor shower
The best place to enjoy this natural light show will be away from bright lights and outside of major cities, like Barrie. Some meteors could appear streaking across the sky for several seconds, leaving a trail of glowing smoke in their wake.

Blizzard confirms multiple Diablo projects in development
Blizzard Entertainment dropped some hints about the future of its popular, long-running " Diablo " franchise on Wednesday. Diablo III first launched back in 2012 for the PC, before it headed over to the PlayStation 3 and Xbox 360 in 2013.

Doom Eternal Gameplay Footage to be Revealed Today at QuakeCon
So you can look forward to that! You can turn this setting off, though, if you just want to beat up some AI characters. There was a claw of some kind that dug into surfaces, but we'll have to wait for more information in the near future.