Turkey Proposes Trade With China, Russia And Iran In Local Currencies

Tyler Durden's picture

Forget the "impossible trinity" - Turkey is facing a just as impossible dilemma where it is trying to juggle two things at the same time: attempts to lower interest rates while supporting its currency, and predictably it is failing.

On Friday, the Turkish Lira crashed to record lows, plunging as much as 3.60 against the dollar when Turkish president Erdogan urged banks to lower interest rates because in order to stimulate investment in the economy "there is no other remedy".

He referred to the United States, Japan and Europe as examples of where rates are low and questioned why Turkey still had such high rates. The Lira, which has soundly ignored the recent rate hike by the Turkish Central bank, plunged on the news, which in turn prompted Erdogan to tell his countrymen to convert their dollars into Lira and gold.

"For those who have foreign currencies under the pillow, come change this to gold, come change this to Turkish lira. Let the lira win greater value. Let gold win greater value," he said during a televised speech in Ankara.

Then overnight, Turkey continued its crusade against high rates, so critical to keep the currency from foundering, when it announced it would prevent companies from borrowing at high rates. The measure will be part of a broader package of economic steps due to be announced Thursday, according to state-run Anadolu Agency which cited Deputy PM Veysi Kaynak as saying in an interview on CNNTurk.

“The rise in the dollar is certainly important, but the rise in interest is affecting our companies very quickly.” He added that the “prime minister will explain a package of measures that will touch the daily lives of our people,” and “relieve our companies financially,” including our banks."

It was not exactly clear how government pressure to lower rates would help the plunging currency, however, in a surprising twist, one which likely seeks to isolate the Turkish Lira from its dependency on the US dollar, Erdogan said on Sunday that Turkey is taking steps to allow commerce with China, Russia and Iran to be conducted in local currencies, in what Reuters dubbed "the government's latest effort to shore up the tumbling lira."

Speaking at the opening ceremony of a shopping mall in Istanbul, Erdo?an said that he had proposed Russian President Vladimir Putin to conduct trade between the two countries with local currencies. 

Turkish President Recep Tayyip Erdo?an speaks during an opening ceremony in Istanbul on Dec 3. / AA Photo

“I proposed Putin the following: Let’s do our trade in local currencies. Whatever I buy [from you] I shall pay you in Russian ruble, and whatever you buy from me make the payment in Turkish Liras,” said Erdogan on December 3, quoted by Hurriyet

He added that he had made the same offer to China and Iran and his offer was found reasonable.  “We have given the necessary instructions to our central banks and we will try to conduct such [trade] relationships between us through this way,” Erdogan said.

Erdogan again reiterated his call to Turkish citizens to convert their foreign exchange into gold or the Turkish Lira. “Those who keep foreign currency under their mattress should come and turn them into lira or gold,” he said. 

Stating that one should convert their foreign currencies to liras or gold against the ones who want to “destroy us,” Erdogan also answered the question of ‘what if we lose money,’ with this currency conversion. 

“Look, this is national, there is fruitfulness in this, you will not make a loss from this, do not worry,” said Erdogan, adding that it was actually the “other,” a reference to foreign currencies, that would make the Turkish people lose because “the other is a representative of the imperial logic.” “You look after your money that is local and national; the money will stay here,” he said.

We expect another sharp move lower in the TRY following these overtures by what increasingly sounds like a desperate regime, one in which Erdogan is likely set to soon take over the central bank next,in his quest to both lower rates and boost the currency.

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Clock Crasher's picture

tick tock tick tock how many fiat currencies have beat a running clock?

tick tock tick tock.

Croesus's picture

I'd really love to see Erdogan lined-up against a wall and shot...he reminds me of Ceaucescu, only he's a little darker, a little fatter, and he looks like the kind of person any parent would be scared to let their kids near. 

Vardaman's picture

A bullet might be overkill.  I suspect exposure to soap would do the job...

BaBaBouy's picture

The USD Fiats Trampling another Whirld Fiats currency ...

Where Doth it End ???

LawsofPhysics's picture

As many have pointed out, the Fed is cornered and they will defend the only thing that they really control.  Specifically the Federal Reserve Promissory Note. Get long Haliburton and companies that manufacture riot gear and body bags.

The planet has been here before.

BaBaBouy's picture

USD & US Jobs ...

Amazombies: Seven seconds to find an item, every move filmed and blistering 12-hours shifts with timed toilet breaks... what YOUR Christmas order does to your 'worker elves'


LawsofPhysics's picture

blah blah blah...

that which cannot be sustained, won't be, period.

Plenty of opportunity out there, if you know where to look.

s2man's picture

LinkdIn says there are 33,000 job openings in my nearby city.

xythras's picture
xythras (not verified) s2man Dec 4, 2016 5:22 PM

Aaaand ... He's GONE (Erdogan)

cheech_wizard's picture

>timed toilet breaks

AT&T's contract with CWA. Winning!

Chupacabra-322's picture

@ Law,

"who have foreign currencies under the pillow, come change this to gold, come change this to Turkish lira. Let the lira win greater value. Let gold win greater value," he said during a televised speech in Ankara.

Saddam attempted to accept the Euro. Result, invasion occupation. Destabiliaztion. Saddam dead.

Qaddafi attempted this. See above.

manofthenorth's picture

Exactly, fuck with King Dollar......

get a short drop with a quick stop or a bayonet enema.

opport.knocks's picture

...and of course Russia and China are now doing the same. Hence their ongoing demonization 24/7 in the MSM.

The petrodollar, not the military is the real source of the power of the USA in the world. The military exists to defend that, and is clearly not up to the task in China and Russia. 

s2man's picture

you beat me to it.  

Not use the mighty dollar for trade?   Them's fightin' words.

Chupacabra-322's picture

Telegraphing these Scum Fucks has gotten real easy lately. However, that's considered "Fake News" nowadays. What used to be marketed as "Conspiacy Therory" by the same Scum Fucks.

zeronetwork's picture

Gold is better medium of business transactions.

opport.knocks's picture

Were you missing the /sarc tag? Gold is among the least efficient mediums of business transactions. If you really meant gold backed paper, say so.

fbazzrea's picture

possibly least efficient, but most assured.

US may not have a choice in the matter. local currencies may be fine, but international trade deficit balance sheets may be forced to settle periodically with real money. i dunno, but...

something wicked this way comes...

Mountainview's picture

Gold backed paper? Only if 100% backed with traceable coverage (Where are the bullions with what numbers). The place where Turkey, Iran, Russia and China will deposit the bullions will be source of the next fight. Maybe Inner Mongolia.

Theosebes Goodfellow's picture

~"Where Doth it End ???"~

So let's walk down that primrose path a tad. As the US Dollar soars and all the other world currencies tank, everyone rushes to convert the currency their holding into US$. Then, once most of the world is vested in dollars, the dollar gets "crashed". Mass wealth extinction. BIS and IMP come in and create new central currency based on a basket of other devalued currencies backed, (at least in name but not in deed), in gold. Reset complete.

Welcome to the Brave New World!

LawsofPhysics's picture

Yes, this has been the plan since 1913.  I do believe that the owners behind the Fed/IMF/ECB etc. have already tried (fairly successfully) to get the vast majority of the world to put their "wealth" in dollars and settle trade in dollars.  Unforunately, I think that has peaked, especially in terms of trade.

Precisely how do these "elites" think that are going "force" anything upon 7+ billion people when the vast majority of those people have no faith in any paper or digital script?

They might be able to force such things in areas where folks have no real resources, weapons, or means of production, good luck with that in my neck of the woods.  There's a reason many of us have been doing business with veterans.  We all understand that all good things (like an honest open society) require real sacrifice.

"Laws" that cannot be enforced don't mean shit.  Just ask John Corzine.

Chupacabra-322's picture

Global Economies specifically in trade will be all Local. Get to know ypur neighborhood folks.

The Global Scum Pure Evil Criminal Globalist are going to Bankrupt some Folks. All done by design, all done by agenda.

s2man's picture

But who will manage this one-world currency?   We a going to need a one-world government to guide us out of economic chaos when the USD &  TSYs tank.  

Wait,  you don't think that is part of their plan,  too,  do you?

opport.knocks's picture

The same cabal that does it now. http://www.bis.org/about/board.htm

The USD has been the defacto one-world currency for 70 years. The problem is that the USA has abused and weaponized that currency as part of asymmetic warfare against regimes who do not support their agenda. The current pushback by the BRICS is long overdue. The predictable efforts by the USA to defend this illegitimate source of world power is also to be expected.

Does anyone really believe the the recent problems in Brazil and Venezuela were due to internal economic and political issues only?

BOPOH's picture

If you don't like my paper or digital scipt - get out of my earth!

slammin_dude's picture

Dude...he's not even close to Ceausescu....that vile piece of shit was ten times worse....Turks are at least allowed to travel, and own property

Croesus's picture

@ Slammin_Dude: 

No shit, Sherlock...one side of my family is from Siebenburgen; we know all about Ceaucescu. 

slammin_dude's picture

my dad was in his prison...whats ut point??

slammin_dude's picture

i was born in Siebenburgen....

Perimetr's picture

Now we need the Saudis to start accepting RMB and Rubles for their oil . . . 

X_in_Sweden's picture
X_in_Sweden (not verified) Dec 4, 2016 10:11 AM

Bullet >>>>>>from CIA>>>>>>> erDOGan......pronounced "air dog gone"....

Vivat Constantinopolis!

Clock Crasher's picture

globalism in check mate

your move mother fucker

Seasmoke's picture

Using Gold to beat the USD. Seems like a plan.

Last of the Middle Class's picture

Wonder how much QE fiat they got to prop up their POS currency.

07564111's picture

Depends on how much the EU are willing to pay him to stay in NATO and how much is that airbase worth to the US.

mary mary's picture

Maybe less than the EU got to prop up their POS currency.

A. Boaty's picture

Off topic:

On Nov. 30, the House passed HR 34, the “21st Century Cures Act.”


From the article:

"[The “21st Century Cures Act”] drastically broadens the criteria for who qualifies for forced psychiatric treatment.  For example, if you are labeled mentally ill, you can be court-ordered for psychiatric treatment just because you are “substantially unlikely to voluntarily participate in treatment.”  All states already have their own laws regarding involuntary treatment and so there is no need for Federal legislation, especially with such dangerously broad language.

It undermines FDA regulations that are essential for making sure medical and drug research is conducted ethically, scientifically and safely.  Meaning it could cost lives.

Additionally, this 996-page bill is being fast-tracked through as it is being introduced with no time for the Senators to fully study and understand the broad implications of it."

If passed by the Senate and signed into law, then you you’ll have an easy way to get rid of the problem people in your life. Simply have them declared legally insane! This game has a serious first move advantage.

Clock Crasher's picture

can you let me know when it is passed please? 

more of the same.

brave new world 1984 hybrid head on collision with 1776 resurgence.

long emigration.

Arnold's picture

I'd rather have a bottle in front of me , than a frontal lobotomy.

mary mary's picture

This is none of the Federal Government's business. 

It's almost as if we have a Congress full of neighborhood nazis who are always looking around to see if anyone's having any fun, and then trying to get the Neighborhood Association or City to call that "witchery" and outlaw it.  No wonder Trump thinks they're mean-spirited sissies.  They are.

Clock Crasher's picture

sell USD and Lira then buy gold and go on a gold standard

China will be your best friend

toocrazy2yoo's picture

Hmmm, sounds like Kadaffi. He wanted to trade in other than dollars. Perhaps if this gets traction, Turkey experiences a touch of the Arab Spring. Hi all. Newbie. Reading for long, commenting just now. Cheers, Merry Christmas.

Fed-up with being Sick and Tired's picture

Exactly put!    We remember what happened to Saddam Hussein when he conducted oil trade in other currencies.  This guy has a bit more life left and gone he will be!

mary mary's picture

Very different locations.

Libya was across the sea from France and Italy (NATO).  Turkey is across the sea from Russia.

Libya had no war-hardened neighbors.  Turkey has Iran and Russia.

Clock Crasher's picture

According to the World Bank, Turkey’s per capita household final consumption expenditure reached USD 5 ,900 in 2011. Turkey’s increasing level of disposable income and the high disposable income levels of its export partners – mostly EU countries, which exceeded USD 15 billion – make Turkey an attractive investment destination.


Turkey’s has a young and extremely large workforce – 7.5 million people between the ages of 24 and 34 – with competitive wage rates of USD 572 per month as of October 2013 .

data from 2014


snakehead's picture

Good timing, now that he's driven the Turkish lira into the shitter.

LawsofPhysics's picture

Anyone can create paper/digital fiat...

What sort of workforce, real products, or resources does your country have to offer for trade...

I think America still has a lot to offer, once we clear out all the useless fucking middlemen in banking and finance as well as the useless eaters...


TRADE is the only thing that keeps people from killing each other in earnest, been this way since the dawn of "civilization"...