Lira Plummets As Erdogan Defies Markets, Urges Citizens To Exchange Dollars For Lira

Heading into today's much-anticipated speech by Turkey's president Erdogan, market expectations were high for at least a trace of conciliation; some analysts even expressed hopes that the central bank, i.e. Erdogan, would greenlight a rate hike as follows:

  • Fidelity: 1000bps would be a "good start"
  • SocGen: 600bps
  • ADM's Ostwald: 500bps + IMF's bailout
  • UBS: 350-400bps

However, it was not meant to be, and it will probably not comes as a great surprise that the recently crowned "executive president" took the populist route and again urged Turks to "reach for the FX savings under their mattresses and sell them for liras" which he said is going to be the most effective response to the West... although probably not, because as Bloomberg points out, according to the latest data Turkish residents held $158.6 billion dollars of FX deposits as of Aug. 3, and the number has surely risen in the past week.

Here is the punchline from his speech:

"We're going to continue to respond in kind to hands extended in friendship. Still, we have plans against all possibilities. I'm calling on interest rates lobbies: don't get high on your ambitions. You won't be able make money on the back of this nation. You won't be able to make this nation kneel."

Some more highlights from Erdogan's defiant speech:

  • Turkey won't give in to economic hitmen
  • "It’s a national, local struggle. It’s going to be my nation’s response to those waging an economic war against us"
  • The "interest rate lobby" won’t be able to bring Turkey down
  • Sees "no issues in Turkey macroeconomic data, banking system."
  • Turkey's facing a wave of artificial financial instability
  • Turkey’s prepared for all possible negative developments
  • Turkey’s facing a wave of “artificial financial instability"
  • Turkey’s made headway in “alternatives" from China and Russia to Iran
1 2
View single page >> |

Disclaimer: Copyright ©2009-2017 Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every ...

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.
Zev Bannett 6 months ago Member's comment

Looks like this leader is intently focused on driving his country into the ground.