The Turkish lira has declined slightly in the first quarter, adding to its recent decline and approaching as long as stability in the United States and the central bank’s headline indicate that rising interest rates could hurt the economy.
The stock, among the worst performers in the coming markets this year, hit 8.425 against the US dollar on Monday, approaching its 2021 watermark and close to its 8.58 record which reached early November.
“Market apathy is rampant. Unfortunately, the risks of the increase have been raised, “said Robin Brooks, chief financial officer at the Institute of International Finance.
Lira has dropped 3.5% in the past three days because it became clear that US President Joe Biden had officially endorsed the assassination and deportation of Armenians into the Ottoman Empire as assassinations.
Turkey, a NATO ally in the US, strongly opposed the White House statement, which was announced on Saturday, saying it had reduced loyalty and ties.
Turkey’s assets are deeply affected by the crisis in Washington’s relationship with US sanctions and financial threats, including the 2018 conflict with then-President Donald Trump, which has led to economic crisis and financial crisis.
The spokesman and adviser to President Recep Tayyip Erdogan, Ibrahim Kalin, told Reuters news agency that Washington needed to be more vigilant as no one would want to “destroy the ongoing political minority.”
“Everything we do with the United States will be subject to this sad statement,” he said in an interview on Sunday.
In addition to the financial jokes, Turkish Central Bank Governor Sahap Kavcioglu, who was appointed last month, said on Friday that even if they abide by the financial rules, meanwhile, any amount could send a bad message to the real economy.
“Who enjoys the highest interest rate?” He said this in his first television interview as the head of a bank.
Lira swam in the last six days of advertising.
It fell by about 15% after Erdogan fired last month from Naci Agbal, a self-proclaimed general of the central bank and elected Kavcioglu, who – like Erdogan – is a strong anti-money laundering activist and advocated a divisive stance on inflation.
Agbal raised the central bank’s interest rate to 19 percent to reduce inflation by more than 16% and is expected to hit 18%. Many foreign traders who confiscated Turkish goods under the auspices of Agbal sold them after they were fired.
Analysts expect the central bank to start cutting prices in the middle of the year and some speculate that Kavcioglu could return to the high price target, which Agbal was selected in November, to sell foreign stocks (FX) to support the lira.
Political opponents have urged Erdogan and his ruling AK Party to account for $ 128bn in FX trading in 2019 and 2020, which are produced by state-owned banks and backed by central bank swaps, severely damaging its FX stockpiles.
In question, Kavcioglu defended the trade in the face of the so-called “attacks” that began with the 2018 crisis.
The depreciation of the lira would have been worse if the rent had gone up had the government not intervened last year, Kavcioglu said.
“You have to meet last year’s FX requirements,” Kavcioglu said. “If you do not, Turkey must face its consequences.” He cited corporations that had collapsed during the financial crisis 20 years ago as examples of how bad things can happen.
Opposition parties have blamed Berat Albayrak, Erdogan’s father-in-law, for more than two years in office and finance for his two years in office.
Kavcioglu said work plans have been in place since 2017 when a memorandum of understanding between the central bank and Treasure facilitated the intervention of foreign exchange.
All deposits in Turkey, including gold and cash deposits by the central bank, are down by more than 15% from early 2020 to $ 89.3bn in April. Global stocks fell more than 75 percent to $ 9.9bn, while short-term loans to banks in the short term reached billions of dollars.
With the swaps removed, all stocks could fall below zero, according to a news agency calculation at Bloomberg.
Kavcioglu “seems to have a lot of confidence in savings,” he said. FX money, ”he said.
Erdogan has fired three kings at the central bank in two years, and undermined financial loyalty among foreign investors.
Saturday’s bid to Biden fulfilled a Democrat campaign promise in 2020 for Armenian-Americans but is in danger of pushing Turkey further ahead of Russia.