Home World Turkey, after the expulsion of the 10 Western ambassadors, the lira collapses

Turkey, after the expulsion of the 10 Western ambassadors, the lira collapses

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The Turkish lira hit yet another negative record following the expulsion ordered by the president Recep Tayyip Erdogan of 10 Western ambassadors to Turkey. The national currency depreciated by more than 2% in one day, breaking through the barrier of 1 dollar for 9.80 Turkish lira and 1 euro for 11.40 lire. According to analysts, the markets have not forgiven the Turkish president’s threats against the heads of diplomatic missions in the United States, Germany, France, the Netherlands, Sweden, Denmark, Finland, Norway, Canada and New Zealand. Declared “persona non grata” last Saturday for signing an appeal for a fair trial and the release of the philanthropist Osman Kavala, in cacere since 2017 on charges of financing the Gezi Park protests in 2013 and participating in the failed 2016 coup.

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A devaluation of over 2% in a single day, in which the Turkish dispute broke through the barrier of 1 dollar for 9.80 Turkish liras and 1 euro for 11.40 lire. The national currency had already reached historic lows last week after the Turkish Central Bank announced, in a move considered reckless by analysts, a new interest rate cut of 200 basis points, taking the reference rate from 18 to 16. %.

Self-described as the “Enemy of Interest Rates”, President Erdogan has long called for a monetary stimulus to boost credit, exports and employment. He fired the last three central bank governors in less than 2.5 years, undermining credibility and driving foreign investors away.

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The latest negative records reached with the opening of the Turkish lira markets were recorded while it is expected, according to sources cited by the news agency Reuters, a cut of interest on loans by Turkish state banks to 16% in line with the Central Bank’s decision to lower its reference rates by 200 basis points. Among the banks concerned there is also the Halk Bank, involved in an investigation in the United States for having helped create a scheme to evade US sanctions against Iran.

Yet another thud of the Turkish national currency comes not only after the deportation order for ten ambassadors, but also a few days after the downgrading of Turkey by the Financial Action Task Force, an intergovernmental organization that deals with combating money laundering and terrorist financing.

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