Turkey's central bank tries to curb lira fall

President Tayyip Erdogan addresses his supporters in Bayburt Turkey on Aug. 10 2018. The Associated Press

The Lira has lost more that 45 percent of its value against dollar this year not only because of the latest diplomatic rift, bus also due to the Turkish economy showing signs of vulnerability after years of continued growth.

On Friday that relentless slide turned into a crash: the lira dropped as much as 18 per cent, hitting USA and European stocks as investors took fright over banks' exposure to Turkey.

The pressure spread across emerging-market assets and the South African rand hit the lowest since June 2016. Currency markets can also hasten these shifts, for example in 1992 when the United Kingdom crashed out of Europe's fixed currency regime, the Exchange Rate Mechanism, after sustained runs on sterling in currency markets.

In its first statement since what was dubbed "Black Friday" in Turkey, the central bank said it was ready to take "all necessary measures" to ensure financial stability, promising to provide banks with "all the liquidity" they need. Meanwhile there are concerns about political interference with the "independent " central bank, especially as the president appointed his son-in-law as finance minister.

They said the bank's decision could be the first step towards tightening policy through the use of an interest rate corridor, an instrument used in previous years, rather than an increase in the benchmark rate.

Oil prices edged lower, with Brent crude off 11 cents at $72.72 a barrel and USA crude as much as 30 cents lower at $67.33.

The reserve requirement moves will free up 10 billion lira, $6 billion, and $3 billion equivalent of gold liquidity in the financial system, the bank said.

"While maintaining flexibility of the exchange, it was also necessary to keep a bottom line mentality", the central bank said.

Isik said the lira's current levels would add between 4 and 5 percentage points to headline inflation in coming months, pushing it up to around 21 percent in September from almost 16 percent last month.

Brazilian Ronaldo In Intensive Care In Ibiza Hospital
Staff at Can Misses Hospital said they were unable to give out any information for " data protection reasons ". He won the Golden Ball at the 1998 World Cup and the Golden Boot four tears later as the Selecao triumphed.

"We will give our answer, by shifting to new markets, new partnerships and new alliances", said Erdogan, who in recent years has built closer ties with countries in Latin America, Africa and Asia. "These banks are thought to have the greatest exposure to Turkish debt and their loans are unhedged".

The Toronto Stock Exchange's S&P/TSX composite index was down 9.04 points, or 0.06 per cent, at 16,317.47.

The lira found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions.

Heightened global tensions didn't do much to support gold prices, which were trading at $US1209.39 an ounce, down $2.31, as strength in the U.S. dollar outweighed the precious metal's safe-haven appeal to investors.

Market analysts broadly welcomed his comments but said investors wanted to see action.

The underlying economic cause for the crisis is simply a lack of confidence in Turkey's economy.

In the interview with Hurriyet newspaper, Albayrak described the lira's weakness as "an attack" - echoing Erdogan, who is his father-in-law.

"The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis", said Andrew Kenningham, chief global economist at Capital Economics.

Related News:

  • Canadian Muslims Worry after Saudi-Canada Spat Led to Cancellations of Flights

    Canadian Muslims Worry after Saudi-Canada Spat Led to Cancellations of Flights

    State Department spokeswoman Heather Nauert speaks during a briefing at the State Department in Washington, Wednesday, Aug. 9, 2017.
    'Elba, Idris Elba': Star's tweet stokes James Bond rumours

    'Elba, Idris Elba': Star's tweet stokes James Bond rumours

    Idris Elba has posted a cryptic tweet, fuelling speculation he could be the next James Bond . People are once again buzzing about the prospect of Idris Elba playing James Bond .
    Man United prepare late £65m bid to sign England star

    Man United prepare late £65m bid to sign England star

    That makes it seven summer signings at Leicester - following Ricardo Pereira, Jonny Evans, James Maddison, Danny Ward and Rachid Ghezzal.
  • ‘Grieving’ killer whale carries around deceased calf’s body for 17 days

    ‘Grieving’ killer whale carries around deceased calf’s body for 17 days

    Exacerbating the problem is that orcas do not have babies often or in large numbers, and when they do, it is a long process. There hasn't been a successful birth among the southern resident killer whales in three years.
    Here's how and when to watch the Perseid meteor shower

    Here's how and when to watch the Perseid meteor shower

    To make the best of the meteors, observers should avoid built-up areas and try to find an unobstructed view to the east. Others are brighter and can appear to sail across our sky for several seconds, leaving a glowing smoke trail.
    Ronaldo finally reveals why he chose to play for Juventus

    Ronaldo finally reveals why he chose to play for Juventus

    Ronaldo tries to keep the ball up for his teammate but mis-controls the ball leaving him red-faced and his opponents in stitches.
  • EPL: Manchester City and Liverpool off to cracking starts

    EPL: Manchester City and Liverpool off to cracking starts

    They do not have that searing turn of speed that is needed to really threaten Premier League defences. Sunday's other game was a goalless draw between Southampton and Europa League contestants Burnley.
    Pakistani lawmakers to elect next PM on Aug. 18

    Pakistani lawmakers to elect next PM on Aug. 18

    The 65-year-old cricketer-turned-politician had contested from five constituencies and had won from all of them. He further claimed that his party has the support of 180 members in National Assembly.

    Horse race bet with William Hill

    How to place a bet To place your wager/bet, all you need is to provide the appropriate information to the ticket writer. Simply you just have to pay £1horse bet and you can easily watch the live horse racing broadcast on your device.
  • Turkey takes action in bid to curb currency crisis

    Banks weren't far behind, with Commonwealth Bank down 0.6 per cent at $74.94, Westpac down 0.5 per cent at $29.41. The rand dropped more than 8 percent overnight reaching almost R16 to the dollar at one point on Monday.
    UMd. head coach placed on leave

    UMd. head coach placed on leave

    August 11, 2018: Maryland announces Durkin has been placed on administrative leave pending an external review. Durkin, who served under Muschamp from 2011-2014 at Florida, is now the head coach of the Terrapins.
    Trump has choice words for ex-aide Omarosa

    Trump has choice words for ex-aide Omarosa

    The memoir is about her tenure in President Donald Trump's administration. "We've all signed them in the West Wing". "No one. Manigault Newman appeared on the show to promote her new book, " Unhinged ", which will be released Tuesday.


Most liked

Saudi Arabia May Back Tesla’s $420-per-Share Buyout
Musk's tweet stunned investors, with many raising questions about his claim that funding for the venture had been secured. In a blog post , Mr Musk said that he only wanted to buy out shareholders who no longer wanted to own Tesla shares.

Tiger Woods show suggests bright future for champion Brooks Koepka
It will be impossible to overlook him now, not with the Wanamaker Trophy to go with his back-to-back U.S. I would have laughed at you and told you there was no way, no chance, and to do it is really incredible.

Derby Complete Signing of Huddersfield Midfielder Scott Malone on Three-Year Deal
Derby started the second half by creating a glorious chance and once again they spurned it. They moved the ball better, we made mistakes which gave them goals.

England vs India, second Test, day four
On the other hand, England are on a roll, with Anderson and Broad - combined age of 68 - bowling as well as they have ever done. The likes of Chris Woakes and Stuart Broad and Sam Curran lent him appropriate support to restrict the Indian batsmen.

Soul Music Legend Aretha Franklin Is Reportedly Near Death
Her brother and manager Cecil died from lung cancer in 1989, one year after her sister Carolyn passed away from breast cancer. Back in March the musician was forced to cancel some concerts, including a show in New Orleans, under " doctor's orders ".

Sevilla threaten to pull out of Spanish Super Cup tie
However, Barcelona struck just before half-time after a free-kick by Messi hit the post before Gerard Pique converted the rebound. Sevilla qualified for the match as last season's Copa del Rey runners-up, after Barcelona won the league and cup double.

Unai Emery Reveals Why He Didn’t Start Bernd Leno Today
Raheem has this special relationship with English football, but he is so loved in the locker room. But, in the end, the agents may not have agreements and that may not happen.

Brooks Koepka holds off Tiger Woods for PGA Championship
Brooks Koepka shot 4-under 66 to finish at 16-under 264. "I just don't think I hit it hard enough, and that's a shame. His ball ended up in a gnarly tuft of rough and he was unable to advance the ball to the green and save par.

Betts caps off MLB's 1st cycle of season with 9th-inning HR
A fan in the left field seats caught two home runs balls, snagging Martinez's drive in the fifth and Grichuk's in the sixth. Boston , which owns the best record in the major leagues at 81-34, has won 12 of 15 meetings with Toronto this season.

Manchester United want Jerome Boateng on loan only
But, their reported £22.3 million bid was quickly knocked back by Die Roten , who were looking for double the amount. Boateng also missed a number of games at the beginning of the 2017-18 season due to another hamstring problem.

Nintendo Switch Online service coming in the second half of September
We've known for a good while that the service will provide "access to online play & Save Data Cloud backup ". We have asked Nintendo for more information and will update if and when we hear from them.

Emaciated orca receives antibiotics at crucial time
Scientists had no plans to take the calf away from J35 or her pod, noting the "tight bond, "reports The Seattle Times ". She was moved into a floating net pen and veterinarians assessed her medical condition and treated her.

PGA Championship final round updates as he moves close
Yes, it is a course (where) you can make birdies, but I just think this afternoon there's been a couple of big numbers as well. The Show-Me State has been showing up big time for the PGA Championship at Bellerive Country Club.

US space agency postpones launch of historic spaceship to Sun
The launch now is planned for Sunday, August 12, from Space Launch Complex-37 at Cape Canaveral Air Force Station. Parker, now 91 and eager to watch the craft blast into space, said some people doubted his initial theory.

Welbeck tested in makeshift left-back role for Arsenal
Emery, meanwhile, will know he has much to do, even before a hard derby with Chelsea next weekend. "Today is the first step". A full list of TV coverage from around the world can be found here.