image

Turkey’s president hails steps to help depositors, as lira steadies

The lira was 0.6% weaker at 12.48 to the dollar at 1122 GMT after strengthening sharply on Monday and Tuesday, although the currency is still about 40% down so far this year after aggressive monetary easing engineered by the president.

Before Erdogan announced the government’s plan on Monday to protect lira deposits from further depreciation, the currency had slumped to a record low of 18.40 to the dollar. Afterwards, it rallied aggressively in turbulent trading.

The new measures shift the burden of a weakened currency to the Treasury and encourage Turks to hold lira deposits, after many Turks shifted savings to dollars.

“The programme we announced to bring the exchange rate to a reasonable level within free-market economy rules has achieved its goal,” Erdogan told lawmakers from his ruling AK Party, as he again defended his push for lower interest rates.

“Some came out yesterday, making statements along the lines of ‘now is the perfect time to buy forex, this (currency crash)will continue from where it left off’. Their brains have been watered down,” he added.

More than half of savings held by Turks are in foreign currencies and gold, central bank data shows, with confidence in the lira eroding after years of depreciation and bruised central bank credibility.

RISING COST

The government’s commitment to cover depositors’ losses in case of a further lira depreciation means any weakening could stoke inflation and drive up the budget deficit, bankers and analyst say.

JPMorgan said the deficit would climb by 1% of gross domestic product over six months if the lira weakened by 12%

The central bank said on Tuesday it would support the conversion of foreign currency deposit accounts into lira.

Under pressure from Erdogan, the central bank has cut rates by 500 basis points since September. The president has pledged to continue with his low-rates policy, while opposition parties have called for immediate elections over the currency meltdown.

The government hailed Monday’s rebound in the lira a policy win, but economists say Erdogan’s low-rate model is reckless and see inflation hitting 30% next year from more than 21% now.

The central bank has said it intervened directly in markets five times this month to support lira. It said on Wednesday it sold $844 million in its first intervention on Dec. 1.

Erdogan said on Wednesday he would not let citizens “be crushed” by rising inflation and interest rates, repeating that he would not reverse his policy.

“We know what we are doing, why we are doing it, how we will do it, where we are heading and where we will reach,” he said.

With the lira’s crash, the number of cryptocurrency trades in Turkey surged back above one million from near 500,000, data shared with Reuters showed.

(Reporting by Tuvan Gumrukcu and Ece Toksabay; Editing by Jonathan Spicer and Edmund Blair)


Source link

0 0 votes
Article Rating

S’abonner
Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site Union-trader.com peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site Union-trader.com décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.