With interventions by both the Turkish banking regulators and the country’s central bank failing to halt the collapse in the lira, President Erdogan decided to give it another try, and after several weekend speeches that only exacerbated diplomatic relations with the US while raising concerns about capital controls after the president rejected hiking rates and an IMF bailout, in a televised speech the Turkish president continued to portray Turkey’s current struggle as an “economic siege”, referring to “different forms of these attacks”, and warning that “the economy and other areas” remains potential targets.
“The lira’s recent weakness is part of the economic war being waged against Turkey and has no economic basis”, President Erdogan said adding that his son-in-law, and Turkey’s Treasury and Finance Minister, will “continue to take necessary steps” against “economic siege”
Erdogan promised that the lira will “settle” at a reasonable level soon although it was not clear what level he had in mind. He also vowed that Turkey will never abandon rules of free market economy which is rather bizarre for an “executive president” to say.
Erdogan had a few choice words for the US, commenting on the rapidly-degraded status of the relationship between the two countries: “The US is attempting to stab Turkey in the back… US trade actions are against WTO principals.”
Meanwhile, picking up on the point we noted before, he said that the Turkish judiciary is targeting online “economic terror personalities”, as Turkey prepares to throw in jail anyone it deems is responsible for the ongoing economic collapse… anyone except the president that is. “Those spreading speculation on banks or FX will pay” the president warned.
Finally, he said that today’s developments “bear no similarity to the crises of 1994, 2001 or 2007” which may be the closest admission that today’s development do, in fact, bear a striking similarity to precisely those crises.
Following Erdogan’s speech, the lira promptly resumed its plunged, with the USDTRY spiking back over 7.00 and once again approaching the all time highs set in Sunday’s early session when the currency crashed as low as 7.2362.
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