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The Turkish lira had a new low against the dollar on Friday, and losses rose to 3 percent this month due to concerns about the expulsion of foreign investors by President Recep Tayyip Erdogan’s policies.
Erdogan he has fired three senior central bank officials, including the governor, since March, has raised concerns that politicians will not be able to cope with political pressure to lower borrowing costs, to the detriment of the country’s recovery of double-digit inflation.
The lira traded at $ 8.6145 on Friday, down more than 13 percent since the start of the year. The pound marks the lowest level the currency has ever traded in hours.
“Things are bleak as macroeconomic and political situations turn negative,” said Enver Erkan, an economist at Istanbul’s Tera Securities. “The central bank cannot proactively set the tone, and there have been differences with other currencies in the market due to Turkey’s idiosyncratic dynamics.”
Indicative of the misguided view of investors, the California Senate this week voted on the Public Employee Pension System and the Public Employee Retirement System, two of the largest pension investors in the world, by regional districts and cities choose itT of investment vehicles owned or issued by Turkey t.
Divestment pressure was aimed at punishing the government for refusing to recognize the maximum killing and deportation In the last days of the Ottoman Empire the 1.5 m Armenians were a genocide, said California Sen. Anthony Portantino, who was one of the sponsors of the bill. Turkey claims that Muslims and Christians were equally killed in the chaos of the First World War and the subsequent collapse of the Ottoman Empire.
S&P Global Ratings will announce its final decision on Turkey on Friday. The country’s rating has remained at the B + level, below the investment level, since August 2018. The top three rating agencies, S&P, Fitch and Moodys, classify Turkey’s debt as rubbish.
“That was the culmination of the last balance of payments crisis, [and] it’s hard to argue that things have gone further since, ”said Timothy Ash, chief strategist at BlueBay Asset Management, referring to S & P’s recent rating action.
Erdogan, who has a history of intervention in the central bank, was suddenly fired by the central bank governor in March after a sharp rise in interest rates to cool inflation, which now stands at more than 17 percent. The the president installed a columnist for the newspaper Sahap Kavcioglu He shares an orthodoxy that does not believe that high interest rates drive inflation, under the guidance of the bank.
This week, Erdogan has replaced him after a second deputy governor of the second central bank was fired Shortly after Kavcioglu was appointed. The central bank also replaced several executives, including heads of the banking, research and statistics departments, on Thursday, Bloomberg reported.
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