Turkish lira gains from record low after key minister stays in post
Turkey’s lira rose for the first day in two weeks, partially recovering from a record low, after rumours that President Recep Tayyip Erdoğan would sack his finance minister at the weekend did not materialise.
The lira was trading 0.4 percent stronger at 11.18 per dollar in early afternoon trading in Istanbul, reversing a downward streak that saw it lose as much as 15 percent of its value since Nov. 8. It set the all-time low of 11.348 per dollar late on Friday.
Turkey’s lira has extended a slump against the dollar and euro after the central bank cut interest rates for a third straight month on Thursday to 15 percent. The central bank is lowering borrowing costs on the orders of President Recep Tayyip Erdoğan even after inflation accelerated to 19.9 percent.
The losses for the currency during November sent consumer confidence to a record low, data published by the Turkish Statistical Institute on Monday showed. Confidence fell to 71.1 from 76.8 in October. That was the lowest level since 2004, when the current data series began. Any reading below 100 reflects pessimism among consumers.
Last week, Erdoğan blamed the losses for the lira on a foreign plot, which he said began in 2013, when a wave of public protests erupted against his government. He also criticised people within his ruling party for failing to back his plans for lower interest rates in an apparent swipe at Treasury and Finance Minister Lütfi Elvan.
The website of Turkey’s official gazette, where Erdoğan announces hirings and firings, became unreachable at midnight on Friday as people sought to learn whether Elvan had kept his job.
Elvan said last Tuesday that his ministry had demonstrated clearly that it was doing all it could to battle inflation. He called on other institutions to do the same in comments that appeared to be a veiled criticism of Erdoğan’s interest rate policy.
Some investors hope that Elvan, a veteran bureaucrat, can help counter or soften the unconventional economic and financial policies of the government promoted by Erdoğan’s key advisers at the presidential palace in Ankara.