Turkish lira hits all-time high after Erdogan calls for deportations – .

Turkish lira hits all-time high after Erdogan calls for deportations – .

A money changer holds Turkish lira banknotes at an exchange office in Ankara, Turkey on October 12, 2021. REUTERS / Cagla Gurdogan

ISTANBUL, Oct. 24 (Reuters) – The Turkish lira weakened 1.6% to a record high against the dollar in early Asian trade after President Tayyip Erdogan said he ordered the expulsion of ambassadors from United States and nine other Western countries. Read more

The currency had already hit record lows last week after Turkey’s central bank (CBRT) cut its key rate by 200 basis points, despite rising inflation, in a shock move described as reckless by investors. opposition economists and lawmakers. Read more

The pound hit an all-time low of 9.75 at 6:40 p.m. GMT on Sunday, weakening from Friday’s close at 9.5950. Two bankers attributed the early weakness to Erdogan’s comments on Saturday. It has fallen almost 24% so far this year.

“I am worried (…) for the Turkish financial markets on Monday. The pound will inevitably be under extreme selling pressure, ”said Tim Ash, seasoned emerging market observer at BlueBay.

“And we all know that (Central Bank Governor Sahap) Kavcioglu does not have a mandate to raise rates, so the only defense will be spending foreign exchange reserves that the CBRT does not have. “

Erdogan said on Saturday that he asked his foreign ministry to expel the emissaries for calling for the release of businessman and philanthropist Osman Kavala, who has been detained for four years without being sentenced.

As of Sunday evening, there was no indication that the Foreign Ministry had yet carried out the president’s instructions, which would open the deepest rift with the West in Erdogan’s 19 years in power.

Erdogan’s political opponents said his call to expel the ambassadors was an attempt to distract from Turkey’s economic woes, while diplomats hoped the expulsions could still be avoided. Read more

Turkish state banks were expected to cut borrowing costs on loans by around 200 basis points on Monday, according to three people familiar with the plan, following the central bank’s rate cut last week. Read more

Additional reports by Nevzat Devranoglu; Writing by Daren Butler; Editing by Alison Williams and Kevin Liffey

Our Standards: Thomson Reuters Trust Principles.


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