The Turkish Lira accelerated its recent demise today - breaking below two critical thresholds - as President Erdogan rebuffed investor calls for higher rates to tamp down excess growth (inflation), commenting that they "are speaking out of jealousy."
Investors have called for higher interest rates to moderate an economy they say is overheating, but Turkey’s responded instead with stimulus measures aimed at boosting growth.
“There isn’t much use, from a disinflation perspective, if any tightening by the central bank will lead the government to become even more aggressive via fiscal measures,” Kaan Nazli, a strategist at Neuberger Berman Group, said by email.
And Erdogan's comments today have sparked fresh selling in the Lira...
Those who say Turkey’s growth rate is excessive are speaking out of jealousy, Turkish President Recep Tayyip Erdogan says in a speech announcing new investment incentives in Ankara.
Erdogan says that the Turkish growth rate is creating a more just income distribution, and hopes that unemployment will drop below 10% soon.
Growth means investment. Investment means employment, production, technology, exports and prosperity, Erdogan says.
“Without bringing interest rates down, can these investments be done? We’re talking about an investment-support incentive system, and here, first of all, we need to save investors from these high interest rates"
Above 5.00 against the Euro for the first time ever and above 4.00 versus the dollar for the first time ever...
“This mismanagement of the currency leads to a loss of confidence in the purchasing power of the lira which is hard to cure,” said Lutz Roehmeyer, who helps oversee about $14 billion at Landesbank Berlin Investment GmbH. “Only massive one-off hikes can heal this situation, which is of course not popular as it slows the economy."