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Turkish lira crisis turns political with lawsuit threat

Turkish Treasury and Finance Minister Nureddin Nebati (C) attends a party’s group meeting at the Turkish Grand National Assembly in Ankara on December 22, 2021. Adem ALTAN / AFP

Turkey’s currency crisis turned increasingly political on Thursday after a top minister urged citizens to sue economists who commented on social media about the lira’s slide, Agence France-Presse reported.

Finance Minister Nureddin Nebati’s unusual comments late Wednesday followed the banking regulator’s decision to file complaints against more than 20 people — including a former central bank governor — over their Twitter posts.

Turkey’s beleaguered currency entered a tailspin that saw it lose nearly half its value from the start of November to the moment President Recep Tayyip Erdoğan announced new currency support measures last week.

Analysts blame the falls on Erdoğan’s unorthodox decision to fight inflation by orchestrating sharp interest rate cuts — the exact opposite of what countries usually do in similar circumstances.

The criminal complaint targeted journalists and economists who suggested that the lira’s falls would continue until Erdoğan radically reversed his policy course.

Nebati accused the commentators of using “psychological warfare” by urging Turks to buy gold and dollars in order to preserve their savings against further lira slides.

“File a lawsuit against anyone who misleads you,” Nebati urged citizens in a wide-ranging interview on CNN Turk.

“Let the small investor who makes a loss sue the one who misled them.”

The Turks named in the criminal complaint include former central bank chief Durmuş Yılmaz — now a parliament member from the nationalist opposition İYİ (Good)  Party — and economist Güldem Atabay.

Emerging markets economist Timothy Ash of BlueBay Asset Management called Yılmaz “the best governor during my stint in covering Turkey.”

Yılmaz headed the policy-setting bank when Turkey was still a foreign investors’ darling between 2006 and 2011.

“Güldem Atabay is just an excellent economist trying to do her best covering Turkey,” Ash added.

The controversy comes with Erdoğan’s government preparing to unveil new legislation ahead of an election due within the next 18 months aimed at further tightening government controls over social media.

Turkey has used the threat of heavy penalties to force Twitter and other platforms to appoint local representatives who can quickly follow through on court orders to take down contentious posts.

Yılmaz continued his attacks on Erdoğan’s team on Thursday by poking fun at the finance minister’s suggestion that the US Federal Reserve was owned “by five families” and lacked real independence.

“I swear, we are so tired of this,” Yılmaz wrote.

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