Home » Money

Turkey’s Banks Bear Weight of Currency Crisis

14 August, 2018, 15:26 | Author: Melinda Barton
  • Britain’s FTSE dips as Turkey’s lira crisis shakes world markets

Erdogan on Sunday said that the crash of the lira was a "political plot" and said his country would instead seek new markets and new allies.

The details would be unveiled shortly, the country's finance minister told Turkish newspaper Hurriyet.

The lira has lost about a fifth of its value against the greenback since Friday. It had already fallen more than 40% in the past year. But they said the USA tariff hike on Turkish steel at a time of "considerable stress" tells emerging economies not to expect Washington's help to calm their markets.

Traders shifted into currencies deemed safer, such as the yen and Swiss franc, underlining market worries about Turkey, but on Tuesday those jitters appeared to subside.

However, any China aid would be more of a political gesture rather than something that would bring fundamental support to the lira, he said.

These import taxes came on top of 10% additional tariffs on aluminum and 25% on steel from all countries, in a bid by Trump to protect the United States steel industry and please voters in America's industrial heartland. There is no economic reason ...

"We will give our answer, by shifting to new markets, new partnerships and new alliances, to the one who waged an economic war against the entire world and also included our country", Erdogan said.

"I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars", he said.

Turkey has weathered several tough economic crises over the decades.

The weakness of the Turkish currency has rippled through global markets. The lack of interest-rate action has coincided with a marked worsening of Turkey's relations with the US.

Foreign Minister Mevlut Cavusoglu said Monday that the United States would not achieve aims by exerting pressure and imposing sanctions on Turkey.

The White House on Monday said us national security adviser John Bolton met Turkey's ambassador to the United States to discuss the detention of Brunson.

Turkey and the United States, two North Atlantic Treaty Organisation allies, have been locked in bitter disputes over a string of issues from a pastor's detention on terror charges to the war in Syria.

Trump's decision to double USA tariffs on Turkish steel and aluminium has only exacerbated the situation.

What are Turkish officials doing about the lira?

In a call with reporters late Sunday, Turkey's finance minister Berat Albayrak said Ankara was planning to roll out an "action plan" on Monday in response to the crisis.

"What you want to see is tight monetary policy, a tight fiscal policy and a recognition that there might be some short-term economic pain - but without it there's just no credibility of promises to restabilise things", said Craig Botham, Emerging Markets Economist at Schroders.

Mr Erdogan has presided over soaring inflation and borrowing levels, but insists the lira's plight is the result of a "campaign" led by foreign powers. Mr Erdogan favours lowering borrowing costs to fuel credit growth and economic expansion.

By Monday morning, the fear of contagion was spreading to Asia, from Hong-Kong and Singapore to South Korea and Japan.

But a rapidly falling currency like the Turkish lira undermines that confidence as much more local money is needed to service foreign debt - making default that much more likely. Erdogan's remarks also knocked back investors' expectations of a rate hike from the central bank. In particular, the report flags that Spain's BBVA, Italy's UniCredit and France's BNP Paribas, all of which have significant operations in Turkey, are especially exposed.

Higher US rates make the dollar more attractive to hold, offering investors an extra incentive to switch out of risky emerging country assets.


  • Klopp has great expectations Liverpool will deliver

    Klopp has great expectations Liverpool will deliver

    West Ham manager Manuel Pellergini responded by introducing former Manchester United striker Javier Hernandez after the hour mark. Liverpool eased to victory with Sadio Mane scoring twice between efforts from Mohamed Salah and substitute Daniel Sturridge .
    Pope changes teaching to oppose death penalty in all cases

    Pope changes teaching to oppose death penalty in all cases

    The only place in Europe where it is still legal is Belarus, which has a sizeable Catholic minority of about 7% of the population. Still, she said, it would be inappropriate for a governor to block all death row penalty cases based on his or her faith.
    Cop hit by flying beer bottle at nail salon protest

    Cop hit by flying beer bottle at nail salon protest

    It's hard to tell who instigated the violence, but it appears to be the workers at the nail salon who are dealing the most force. Immigration and Customs Enforcement)?" implying that the salon's Asian employees might be undocumented immigrants.
  • Stocks plunge worldwide as crisis in Turkey reverberates

    The drop in the lira has put increasing pressure on Turkish banks, given many companies have borrowed heavily in foreign currency. Turkish President Recep Tayyip Erdoğan struck a defiant note in a series of Twitter messages shortly before Trump's announcement.
    Boateng trains with Bayern amid PSG and Manchester United links

    Boateng trains with Bayern amid PSG and Manchester United links

    In successive transfer windows, the Merseyside club has broken the world transfer fee record for both a goalkeeper and a defender. Asked if there was good competition between him and Jimenez, Bonatini said: "Yes, we are all here to help each other".
    Samsung Galaxy Note 9 to be released on August 24

    Samsung Galaxy Note 9 to be released on August 24

    In another tweak, the S-Pen supports Bluetooth LE mode for certain functions, as a remote controller for presentations or selfies. Though they rarely agree on much, most Samsung users and iPhone users can agree that smartphone batteries need work.
  • Five things we learned in Premier League's first weekend

    Five things we learned in Premier League's first weekend

    Ahead of the 2018/2019 season kick-off, we take a look at which teams spent the most money during the just concluded window. He also praised Luke Shaw, who scored to seal the win and had been a target for Mourinho's criticism last season.
    Everton head late rush for players on transfer deadline day

    Everton head late rush for players on transfer deadline day

    Moments later they also confirmed that Portugal worldwide Gomes would join the Premier League side on loan. Late move: Barcelona defender Yerry Mina , who starred at the World Cup for Colombia, is off to Everton .
    Derrius Guice tears ACL in Redskins preseason opener, out for 2018 season

    Derrius Guice tears ACL in Redskins preseason opener, out for 2018 season

    ACL tears typically take at least six months to recover from and the track record of being the same player has been mixed. He had suffered a hyperextended knee (yes, the same knee) at LSU but opted against surgery, also per Rapoport .
  • Anti-fascist marchers in Charlottesville mark Heather Heyer anniversary

    Anti-fascist marchers in Charlottesville mark Heather Heyer anniversary

    Authorities eventually forced the crowd to disperse, but a vehicle later barrelled into the crowd of peaceful counterprotesters. On Friday, businesses are handed out pins with a singular message in mind: spread love, and move forward united.
    3 dead, 11 injured in rocket launches, airstrikes in Israel and Gaza

    3 dead, 11 injured in rocket launches, airstrikes in Israel and Gaza

    In May, more than 100 rockets were launched from Gaza in the worst escalation since 2014, when Israeli troops invaded Gaza . Clashes along the Gaza border since the end of March have seen at least 165 Palestinians killed by Israeli fire .
    The Royal Family Has A Plan For Ending Meghan Markle's Family Drama

    The Royal Family Has A Plan For Ending Meghan Markle's Family Drama

    She also became a volunteer for the Scout Association, working near her home in North Wales where she lived at the time. Engelson, who is 5 years older than Meghan, met the Suits actress in 2004 and they were together for 7 years.


Klopp not getting carried away after Liverpool’s opening rout
New West Ham boss Manuel Pellegrini gave debuts to five new signings and he admitted it will take time to bed them all in. JURGEN KLOPP is not getting carried away with one result, despite Liverpool's convincing start to the Premier League .

Omarosa says she secretly taped her own firing
She says that she saw the Commander-in-Chief eat a piece of paper after a meeting with his then personal attorney, Michael Cohen. Omarosa needs a lawyer-she made a recording of the White House Chief of Staff in a classified area called a SCIF.

Brooks Koepka tops Tiger Woods by two shots in PGA Championship
Speaking after his third-round 66, Woods admitted the delay in play over the course of the weekend has taken it's toll on him. Woodland and the rest of the field are chasing Koepka, who has won the past two U.S.

Baker Mayfield's First TD Ball Thrown Back By Giants Fan
The Cleveland Browns will open their preseason against the New York Giants at MetLife Stadium Thursday night. Mayfield hit fourth-round pick Antonio Callaway over the middle for a 54-yard touchdown in the third quarter.

Newcastle United Not Battling Everton and Southampton For Danny Welbeck
He also identified the confidence that the Etihad outfit always plays with as another strength that Arsenal should keep watch of. With the same players and also our new players with us, and with a new culture and new staff".

Dallas County First West Nile Death 2018
Most cases of West Nile virus infection were registered in Dolj (5), Olt (4), Iasi (4), Braila (2), and Ilfov (2) counties. In addition to human cases, one horse, 10 birds and 34 mosquito pools have also tested positive for WNV.

College coach arrested in punching death in Queens
Both the NY police and the Queens district attorney's office said Friday the case remained under investigation. According to NBC New York , Szabo had knocked on Jones' auto window, mistaking the vehicle for his Uber ride.

Stephen Colbert declares Infowars’ Alex Jones has lost his 'war on info'
Apple , Google and Spotify have all taken action against InfoWars over the past few weeks over concerns about its extreme content. In an apparent reference to other tech companies, he added that Twitter would not "succumb and simply react to outside pressure".

How US-China trade war may bring cheaper oil to Indian shores
The dollar index, which measures the greenback against six major peers, fell 0.15 percent to 95.217 at 3:00 p.m. (2000 GMT). While some sanctions started from August 6, others, most notably in the petroleum sector, will be applied from November 4.

Klopp hails Loris Karius' Anfield reception
Former England global Redknapp is impressed with Klopp's transfer business ahead of the new Premier League season. Salah's driving run across the box teed the striker up for a shot which found the top corner via a deflection.