empty
26.03.2021 10:56 AM
Lira plummets after Turkish president sacks Central Bank's chief

This image is no longer relevant

Many are becoming increasingly concerned because of inflation, depreciating currencies and rapid depletion of reserves. Then, in the middle of it, another controversy occurred, that is, the dismissal of President Recep Erdogan to Turkey's Central Bank chief.

This is already the third dismissal in two years, as a result of which lira declined very sharply in the market. But President Erdogan said Turkey's economy is holding up, and that market volatility this week does not reflect changes on it.

However, in the same speech, he called for selling foreign exchange assets and gold, and buying lira-based financial instruments to stabilize the beleaguered currency, which has lost 10% of its value since Friday.

"The chances of seeing a currency depreciation is increasing," said Capital Economics. They also pointed out that investor confidence was high before because former Central Bank governor Naci Agbal raised key interest rates by 875 basis points in order to fight double-digit inflation.

But Erdogan has long held the unorthodox view that higher interest rates cause inflation and are detrimental. In fact, many said it was only a matter of time before Agbal was replaced by someone more convenient to Erdogan and of similar views. This prompted investors' fears that the central bank lacks autonomy, and that inflation and currency crisis will soon shake the country.

To add to that, many say the new Central Bank chief, Sahap Kavcioglu, is inexperienced in the area, thereby increasing concerns about uncontrolled inflation.

When the lira collapsed last May 2018, it was because of similar concerns on the monetary policy. It shocked many Spanish and French banks that were heavily reliant on Turkish assets. But according to Can Selcuki, managing director of Istanbul Economics Research, this event is not a problem now.

This is because to date, Spain's banking sector is leading in terms of engagement with the Turkish public sector. It owns $ 14.7 billion Turkish assets, including government bonds. Meanwhile, France has $ 6.4 billion in investment.

But pressure on lira will only intensify, claimed analysts from Goldman Sachs.

Before, the strategy of the Turkish central bank to strengthen the currency was to buy more dollar pairs, which burns up its foreign exchange reserves.

"Resuming currency interventions like this may be the initial reaction, but buffers are comparatively low," said the Goldman Sachs.

According to them, Turkey's gross foreign exchange reserves amount to $ 35.7 billion, which, in our opinion, is "insufficient to support ongoing interventions."

"Erdogan's actions could be the last straw for many," said Tim Ash, senior strategist at Bluebay Asset Management. "It seriously undermines Turkey's reputation among investors," he added.

To date, lira has lost about 15% of its market value.

This image is no longer relevant

Andrey Shevchenko,
Especialista em análise na InstaForex
© 2007-2025
Selecionar intervalo de tempo
5
min
15
min
30
min
1
hora
4
horas
1
dia
1
s.
Ganhe com as variações das taxas das criptomoedas com a InstaForex.
Baixe o MetaTrader 4 e abra a sua primeira operação.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    PARTICIPE DO CONCURSO

Recommended Stories

USD/JPY: Análise e previsão

O iene japonês permanece em território defensivo frente ao dólar dos EUA, impulsionado pela melhora no sentimento de risco global após as novas medidas de estímulo anunciadas pela China

Irina Yanina 20:01 2025-03-17 UTC+2

USD/CAD: O par começa a nova semana com cautela

O par USD/CAD começa a nova semana com cautela, flutuando em uma faixa estreita acima de 1,4350 e permanecendo acima da SMA de 50 dias. No entanto, fatores fundamentais sugerem

Irina Yanina 17:32 2025-03-17 UTC+2

Os mercados permanecerão em um estado de depressão por algum tempo (esperamos uma nova queda em #Bitcoin e #Litecoin)

Os mercados financeiros globais continuam a ser fortemente influenciados pelas políticas do presidente dos EUA, que está rompendo com a estrutura econômica e geopolítica estabelecida antes de sua administração. Naturalmente

Pati Gani 17:26 2025-03-17 UTC+2

O dólar é vendido, a ameaça de recessão aumenta e o índice S&P 500 corre o risco de sofrer um grande colapso

A venda do dólar continua sem sinais de desaceleração. De acordo com o relatório da CFTC, a posição líquida comprada sobre o dólar americano diminuiu em mais US$ 4,6 bilhões

Kuvat Raharjo 17:22 2025-03-17 UTC+2

Visão Geral do Par GBP/USD - 17 de Março: Mercado estagnado e desinteresse pela economia

O par de moedas GBP/USD ficou completamente estagnado na sexta-feira. O gráfico abaixo mostra claramente que houve volatilidade significativa nos três primeiros dias da semana retrasada, quando o dólar estava

Paolo Greco 17:11 2025-03-17 UTC+2

Os investidores em ações estão prontos para comprar ações durante a queda?

Tudo pode acontecer, mais cedo ou mais tarde. O S&P 500 entrou em território de correção em apenas 16 pregões. Nos 24 casos anteriores em que as ações caíram 10%

Marek Petkovich 16:15 2025-03-17 UTC+2

Dólar dos EUA: Previsão semanal

A América voltará a ser o grande foco das notícias. Mas isto não se deve, em primeiro lugar, a atualizações econômicas ou à reunião do Federal Reserve

Chin Zhao 14:57 2025-03-17 UTC+2

Euro sob ameaça de um golpe

O Partido Verde respondeu com uma forte refutação ao apelo de Friedrich Merz por uma coalizão entre a CDU e os social-democratas para abolir o freio fiscal: "Não acreditamos

Marek Petkovich 17:26 2025-03-14 UTC+2

Surge um novo problema para os Estados Unidos - o teto da dívida (expectativa de que a #SPX e a #NDX retomem sua queda após uma provável recuperação de curto prazo)

O confronto entre os EUA e a UE entrou em uma nova fase. O presidente dos EUA está adotando uma postura rígida em relação à Europa, seguindo essencialmente uma estratégia

Pati Gani 17:17 2025-03-14 UTC+2

Em que prestar atenção em 14 de março? Uma análise dos eventos fundamentais para iniciantes

Há poucos eventos macroeconômicos agendados para sexta-feira, e nenhum deles é significativo. O Reino Unido divulgará relatórios sobre PIB e produção industrial, mas não são esperados números fortes. Além disso

Paolo Greco 16:15 2025-03-14 UTC+2
Não pode falar agora?
Faça sua pergunta no chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.