Turkey will emerge stronger from lira crisis, finance minister tells investors

Turkish Finance Minister Berat Albayrak speaks during a presentation to announce his economic policy in Istanbul, Turkey August 10, 2018. — Reuters pic
Finance Minister Berat Albayrak speaks during a presentation to announce his economic policy in Istanbul, Turkey August 10, 2018. — Reuters pic

ISTANBUL, Aug 16 — Finance Minister Berat Albayrak assured international investors today that Turkey would emerge stronger from its currency crisis, insisting that the country’s banks were healthy.

In a conference call with thousands of investors and economists, Albayrak — who is President Tayyip Erdogan’s son-in-law — said Turkey fully understood and recognised all its domestic challenges but was dealing with what he described as a market anomaly.

With Ankara locked in a furious row with the United States, he also played down a decision by President Donald Trump to double tariffs on imports of Turkish metals.

Lots of countries had been the target of similar US trade measures, he said, and Turkey would navigate this period with other parties such as Germany, Russia and .

The Turkish lira hit a record low of 7.24 to the dollar this week, down 40 per cent this year, as investors fretted over Erdogan’s influence over monetary policy and the dispute with the United States.

Facing Turkey’s gravest currency crisis since 2001 in his first month in the job, Albayrak has the daunting task of reassuring the investors that the economy is not hostage to political interference.

Albayrak, a 40-year-old former company executive with a doctorate in finance, said Turkey would not hesitate to provide support to the sector. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.

Before he spoke, the lira strengthened more than 3 per cent, despite signs that the rift with the United States is as wide as ever.

However, the currency market’s reaction to his conference call — in which he also said Turkey had no plans to seek help from the International Monetary Fund or impose capital controls to stop money flowing abroad — was measured.

After he finished speaking, the lira was little changed from beforehand, meaning it remains down around 34 per cent against the dollar this year.

Earlier in the day, the currency had shrugged off US comments ruling out the removal of steel tariffs on Turkey even if it frees an American pastor who lies at the centre of the complex feud between Washington and Ankara.

Qatari pledge

The currency gained some support from the announcement late yesterday of a Qatari pledge to invest US$15 billion in Turkey.

The White House said yesterday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges.

Washington wants the evangelical Christian freed but Turkish officials say the case is a matter for the courts.

Trump’s doubling of tariffs on Turkish metals last week prompted Ankara, which says it will not bow to threats, to raise tariffs on US cars, alcohol and tobacco by the same amount yesterday.

The pastor row is one of several between the NATO allies, including diverging interests in Syria and US objections to Ankara’s ambition to buy Russian defence systems, that have contributed to instability in Turkish financial markets.

‘Economic coup attempt’

Erdogan has repeatedly told Turks to exchange and hard currency into lira, saying the country was involved in an economic war with enemies.

However, Turks appeared not to be heeding his appeal. data showed foreign currency deposits held by local investors rose to US$159.9 billion in the week to Aug. 10, from US$158.6 billion a week earlier.

Erdogan has called for a boycott of US electronic goods and Turkish media have given extensive coverage to anti-US protests, including videos on social media showing Turks apparently burning dollar bills and destroying iPhones.

Turkish Airlines and Turk Telekom have said they will halt advertising in US media.

The White House called the Turkish counter-tariffs a step in the wrong direction and signalled a hard line.

“Pastor Andrew Brunson is an innocent man held in Turkey & justice demands that he be released. Turkey would do well not to test Trump’s resolve to see Americans who are wrongfully imprisoned in foreign lands returned home to the United States,” Vice President Mike Pence said in a tweet.

Yesterday, a court rejected an appeal for Brunson to be released from house arrest. An upper court had yet to rule on the appeal, his lawyer told Reuters. — Reuters

Source: The Malay Mail Online

Leave a Reply

Your email address will not be published. Required fields are marked as *

Time limit is exhausted. Please reload CAPTCHA.