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Turkish Lira Tumbles To Record Low As Government Questions Central Bank's Patriotism
Another day, another currency hits a record low against the US Dollar. The Turkish Lira has collapsed in recent weeks since Erdogan rampaged against the 'independence' of the Central Bank and extended losses today after the economy minister said the government should discuss changing central bank regulations. Nihat Zeybekci said the Central Bank of Turkey’s independence should be conditional on the body taking “national interest” into account. Turkey continues to dump gold at record rates (money laundering to Iran via Switzerland?) and social unrest is on the rise (despite new laws to clamp down on protests) as the US consulate faces bomb threats.
The Lira keeps tumbling...
As Bernd Berg, the director of emerging-markets strategy at Societe Generale SA in London, said:
"The lira is now poised to tumble much further amid the political turbulences and questions about the independence of the central bank."
"The escalation of political risks is a major concern."
Simon Quijano-Evans, a strategist at Commerzbank AG in London, said:
“An unnecessary blurred central bank picture will do nothing but aggravate the situation and lead to FX uncertainty."
And add to that the poltical and social unrest occurring in the country, including bomb threats at the US consulate:
Turkish police arrested a suspect outside the US consulate in Istanbul on Friday, after he claimed to have a bomb and threatened to carry out an attack.
The person had parked his vehicle in front of the consulate in the mid-morning and police had cordoned off the entire area during the incident.
"A suspect was apprehended by local authorities and the vehicle was removed without incident," the consulate said on its Twitter feed.
The person may be suffering from mental illness, the Dogan news agency reported.
In 2013, the US embassy in Ankara was attacked by a suicide bomber who killed a Turkish security guard.
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And Turkey continues to dump gold (as we have detailed in the past):
Turkey’s rocketing gold exports helped narrow the trade deficit to its lowest level since 2010.
...
The surge in gold sales limited the annual drop in exports to 0.6 percent while imports fell by 13.7 percent to $16.6 billion. Switzerland was the top destination for exports of the precious metal, accounting for sales worth $982 million. Turkey has in the past seen occasional spikes in the metal’s exports and the January jump in shipments will prove to be a temporary phenomenon, according to Deniz Cicek, an economist at Finansbank in Istanbul.
“Gold lies behind the pleasant surprise in January,” Oyak Bank chief economist Mehmet Besimoglu said by phone. “Exports would have fallen significantly if it wasn’t for gold.”
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As SocGen previously warned, The honeymoon is over
Turkey was supposed to be the big trade of the year. After all, it did look particularly good at some point, with the sharp decline in inflation and the collapse in oil prices. Somehow, Turkey had become the new darling of global emerging markets (GEM).
Fast forward a month or two and this is now all over.
So what happened? Essentially, a big policy error on the part of the central bank in the context of serious political pressures. The emergency meeting saga caused tremendous damage to the credibility of the policy framework and to investor confidence.
I am in the US visiting investors right now, and nobody is bullish on Turkey any more.
Last time I was there, everybody was. If I had been in the governor’s shoes, I would have stayed quiet and continued easing normally at each scheduled meetings. Nothing wrong with that, and in fact, Mr. Market was going to love it. I would also have looked up the definition of “emergency” in the dictionary.
The TRY selling off by 2% each day, causing serious stress in the local financial market? An emergency.
Inflation declining a bit faster than usual, helped by fortunate external factors? Not an emergency.
Overall, this was a highly disappointing experience and now the CBRT has moved to my list of “fading” central banks from that of the “following” ones. What I mean by that is I want to position for policy backtracking in Turkey at this point, given the heightened risk of policy volatility. Our 1s5s curve steepener has been struggling quite a bit, as it was a bullish trade on market-friendly policy easing. We just elected to close it at flat PnL.
Meanwhile, I believe that positioning is still heavy on the Turkish bullish side, even if sentiment has sharply deteriorated, which represents a major technical risk.
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And the once golden boy trade of the year has now become a never-ending nightmare.
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Dear Turkey,
You're next... if people don't wake the fuck up to the zio agenda
Nothing Like Selling Your GOLD Reserves To Boost "Exports" ...?.?.??????? Huh...
Geee, Wonder WHY The Turkey Fiats Is Plunging ...?...
Somebody is evidently not getting a big enough cut of the vig...
Is that bad? I question the Fed's patriotism every day.
I am actually surprised they have not been given Euro memership yet as it seems they've been doing all the right things and I personally invite them into the pool; come in - the waters cold
hang on to those turkish lira people, they will be worth much moar in the future. lulz
Help me out on this one boys; the zio rothschild hasbara yids control the Turkish central bank, right?
Lmao!!!
Yeah, Rothschild has, nor has ever had, any interest in having his own money counterfeitting operation in Turkey which would enrich his BFF's like the guy whose pool you clean.
As Chuck Schumer is fond of saying [paraphrased], "Mr. LasVegasDave, GET BACK TO WORK!"... Only in your case, he means it literally, not figuratively. Until that Baby Ruth bar is outta there, you're still on the clock.
When Obama leaves his imperial seat he will write a book called How to screw friends and badly influence people
When Obama leaves his imperial seat he's gonna be hanging out at the gay bar while the next puppet mascott is installed for the hapless donkeys.
"The lira is now poised to tumble much further amid the political turbulences and questions about the independence of the central bank."
Yellen's Perfect Plug....without being impolite.
The old bags don't need plugs anymore...not Yellen, not Clinton, not Warren.
And we thought the lessons of Great Depression were learned. We had a WWI and WWII now we have GDI and soon GDII followed by WWIII
Where's Ataturk when you need him? He'd have slapped the Islam out of Erdogan. He wasn't playing around with that shit...I'll bet he'd have even let people draw pictures of the Prophet if they wanted.
I really don't see how a head of state fucking over a privately owned Central Bank is a bad thing.
Bemused Observer
you are one dumb whore that needs a bitch slap : )
just sayin
and like you moshe the erdogan is a tamudick jewisher just like the house of saud rabbi.
Selling gold, pleasant surprise, chief economist...Happy Happy Happy we exported gold in the face of a crashing currency. (Who's buying it, the gold I mean)
I believe ISIS will soon be looking at that new presidential palace in Ankara that Erdogan built illegally. Pretty nice digs for the new caliphate to set up shop in.
Won't it be interesting when ISIS moves on a Nato member?
If Ataturk was there today, those European jihadi wannabees would NOT be meeting up with their ISIS escorts at the Istanbul airport...
ISIS is NATO - or the important parts of NATO, to be precise.
Gold is trading in 'Courics' over on the Southpark site!
Here come the airstrikes....
Turkey's CB: "We fucked over some folks."
Another FIAT currency that goes in collapse mode, why I'm not surprised at all ?
Don't be idiotic, this is a tradition over there. Just a few years ago they dropped five (00000) fucking zeros from their fiat.
six