Turkish President Tayyip Erdogan has ordered an investigation into possible currency manipulation after the lira fell sharply to record lows against the dollar this week, the Anadolu news agency reported on Saturday. The directive could be the precursor for yet another crack-down on foreign institutional investors, reminiscent of Berat Albayrak days.
AA said Erdogan had tasked the State Supervisory Council, an auditing agency which reports to the presidency, to identify institutions that had bought large amounts of foreign currency and to determine whether any manipulation had occurred.
In the past, such inquiries, accompanied by concerted of “foreigners manipulating markets” had led to banking regulator BRSA banning swap transactions, while Capital Markets Board has slapped heavy fines on international brokers for presumed market manipulation.
Turkish press sources claim, the currency crisis being the work of foreign agents is now official state policy, which is the harbinger of draconian new regulations on financial markets. The National Security Council declaring that Turkey is in an “economic war of independence”, adds to concerns. Main opposition party CHP and left-wing experts fear Erdogan declaring a State of Emergency.
The lira plunged to record lows this week after Erdogan pledged to stick with a policy of easing interest rates. It has lost as much as 45% of its value this year, with about half of those losses in the last two weeks.
The currency fell as far as 13.45 to the dollar in a historic 15% selloff on Tuesday that followed a speech in which Erdogan defended the central bank’s move to slash its policy rate to 15%, despite inflation of 20%.
During the speech, he said Turkey was fighting an “economic war of independence” and would not yield to pressure to change course.
“We are seeing the games that are being played over the exchange rate, interest rates and price rises by those who want to push our country out of the equation,” he said.
Turkey’s State Supervisory Council can demand that organizations present relevant information and documents, and will forward its findings to relevant authorities, state-owned Anadolu said.
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