Lira getting Stronger - Why?

[Colwyn]

According to Reuters, financiers are watching keenly to see what Erdogan has to say at a formal lunch he is hosing for Provincial Governors which is taking place right now.

http://www.reuters.com/article/2015/02/27/markets-turkey-idUSL5N0W12M520150227

[scorcher]

Let's hope the soup survives.   

[Colwyn]

Let's hope the soup survives.   

Of course I meant to say that RTE was hosting the lunch; not hosing it. My apologies to the soup.

[yabanci]

The lira weakened again today hitting record lows against the dollar, now over 2.53, and the pound hitting 3.90, as Turkish inflation figures rose slightly for last month.

[JohnF]

He's upping the ante:

Seeking to boost flagging growth ahead of a June general election, Erdoğan has warned that defending high interest rates amounts to treason, ratcheting up pressure on the Central Bank and telling Governor Erdem Başçı to “shape up.”

HDN

JF

[Colwyn]

One of the links posted earlier stated that it was too late for any (real) economic impact of lowering interest rates to have any discernible impact before the General Election. On the other hand, according to the CB 80% of Turkish corporate debt is in foreign currency and when firms have to service this debt (i.e. pay interest or pay it off) it becomes more and more expensive in lira to do so. And this happens immediately.

I think we can assume the RTE v Basci struggle now has little to do economics and more to do RTE's testosterone and religious dogma. Will AKP voters be proud of their new sultan is standing his ground against the CB? Surprisingly, to me, a recent opinion poll suggest some doubt over this showing 52% of AKP voters think it is cold economic factors that should drive the CB. From the general population 17% think the CB ought to follow RTE instructions; 68% think the CB should be ruled by "economic realities" (whatever they think that might mean).

http://www.hurriyetdailynews.com/over-half-of-turkish-population-does-not-approve-of-erdogans-pressure-on-central-bank-poll.aspx?pageID=238&nID=79029&NewsCatID=344

[Colwyn]

The title of this thread is now looking decidedly post-modern ironic. Erdogan today moved from just blaming Basci to roping in Deputy Prime Minister Babacan as well - someone who has been a central pillar of the AKP Government since the start in 2002. Today, he told the pair of them that they need to "correct themselves". The lira obligingly promptly dropped another 1% against the dollar which now buys 2.56TL. RTE then flew off to Saudi Arabia. One more strong speech from RTE on his return stressing his new economic theories for the New Turkey, and condemning Basci and Babacan for failing to understand their weight and justice, might well deliver £1 = 4TL.

This link is something of a lightweight "pop" article but it quite fun:
http://www.hurriyetdailynews.com/erdogans-trouble-with-the-good-old-akp.aspx?PageID=238&NID=79139&NewsCatID=411

[kevin3]

       TL 3.95 this morning,  Finans'.

[Colwyn]

And that's after CB chucked in nearly $4billion this morning trying to support it. Countdown to 4:£ ? Ten .... nine .... eight .........


Click ... 3.96

[usedbustickets]

Prime Minister Davutoglu is in New York with a herd of AKP apparatchiks, trying to extol the wonders of Turkey under AKP control. In speeches to various American financial houses (Merril Lynch etc.) he is trying to calm the nerves of both potential and actual investors in the Turkish economy.   Against the backdrop of the Lira plummeting to all time lows - 3.96TL to the £ - but it would appear that no one is listening to him, or his accompanying economics team as the lira continues to fall during, and after his re-assurances.  Then again these investors and speculators alike, are reasonably smart, and they know that this puppet Prime Minister is not in charge ..... step forward Reg!!  He is currently in Saudi Arabia putting the Saudis right on Middle East and Foreign affairs ..... but the dim, the pious, large sections of the Kurds will still vote for him and the AKP .... you couldn't make it up.  Some times I could weep for the Turkish nation.