Erdogan: Gold from kisses to lira

Erdogan: Gold from kisses to lira

World August 4, 2018 21:42

- 'Get your gold from under your pillow and exchange it for Turkish lira.' With that call, also for euro banknotes, President Recep Tayyip asked Erdogan Turks to use their property as 'resistance against the whole world'.

His call follows the dramatic decline in the value of the currency especially against the dollar after sanctions from the US.

On Saturday, Turkey ordered seizure of assets from American officials in the country, according to CNN.

The Turkish economy is heavily dependent on investments in foreign currencies. On Friday, Erdogan announced an action plan for the next hundred days to boost its economy, which is growing at 7.4% year-on-year.

The president wants to build $ 200 billion of new airports, bridges and the new 'Istanbul Canal' with a series of cities alongside. To this end, the central bank will issue bonds in its own currency. Erdogan counts on its own population as buyers.

Erdogan explicitly referred to China, Inda and Russia as new 'core markets' last week, and Europe falls outside.

Due to newest actions, the country is probably closing more of the American financial markets. Many projects were previously financed in dollars.

The Turkish lira fell Friday by the 'psychological border' according to currency trader Bart Hordijk of Monex Europe. It seems 'like the ingredients for a currency crisis are present,' says Hordijk.

Portfolio manager Paul Greer of asset manager Fidelity International calls it 'to see if the country is able to achieve growth that is more sustainable than the overheating of the past twelve months'.

The call to exchange gold and euros against lira fits in with Erdogan's previous charges against foreign powers, which would try to destabilize the Turkish economy.

Inflation is coming to a halt, with a 15.4% rise in official price rises this year.

The United States imposed sanctions on Turkey last week because Erdogan refused to extradite the imprisoned American pastor Andrew Brunson.

Erdogan sees in Brunson a supporter of the Turkish leader Fethullah Gülen, who lives in the US. According to Turkey, this movement is responsible for the coup attempt in 2016.

Turkey, in turn, has been demanding two years of extradition from Fethullah Gülen, who lives in exile in the United States. Even before this quarrel, the Turkish lira lost 20% against the dollar.

Currency traders fear a new series of sanctions against Ankara from Washington this week. On August 1, President Trump seized US assets from Turkish Ministers Abdulhamit Gül (Justice) and Süleyman Soylu (Home Affairs). Erdogan threatened with countermeasures and continued on Saturday.

US Secretary of State Mike Pompeo and his Turkish counterpart Mevlut Cavusoglu met on Friday in Singapore to try to solve the problems between the two countries. 'It was a constructive conversation,' said both countries.

Leave a comment

The is not responsible for the content of external sites.


Back to Top