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Turkey’s finance leaders to meet with foreign investors amid lira’s free fall

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Deputy Prime Minister Mehmet Şimşek and Turkish Central Bank Governor Murat Çetinkaya will meet with fund managers and investors on May 28 in İstanbul and on May 29 in London amid the Turkish lira’s free fall, the T24 news website reported.

President Recep Tayyip Erdoğan visited the UK on May 14 and met with global money managers, who were shocked by Erdoğan’s remarks about maintaining a tight grip on the economy and his insistence on low interest rates.

After Erdoğan’s London trip, the Turkish lira’s value against the US dollar decreased dramatically, from 4.44 on May 14 to 4.73 in today’s trading.

Yesterday the Turkish Central Bank announced a decision to raise its late liquidity window interest rate for lending by 300 basis points, from 13.5 to 16.5 percent, which helped the lira climb back from 4.90 to 4.55 per dollar.

Investors, particularly from Asia, have recently lost interest in Turkish markets.

“The move accelerated Wednesday, sending the lira tumbling in excess of 3 percent against the dollar and pulling down other emerging currencies, including South Africa’s rand and the Indonesian rupiah,” Bloomberg stated on its website.

A Financial Times editorial on Wednesday also slammed Erdoğan’s decisions on financial matters.

“The weakness of the currency provided a loud warning that Mr Erdogan’s unorthodox views and erratic policies have been losing Turkey the confidence of financial markets. Financial markets are not like the hapless journalists he has put in prison,” FT said.

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