Jul 12 2018

Istanbul exchange offices stop selling dollars

Currency exchange offices at istanbul’s Grand Bazaar stopped selling dollars on Thursday morning as the lira sank to a record low and volatility increased.

Electronic boards hung outside the exchange offices in central Istanbul were blank, photos taken by newspaper Sozcu showed.

Other bureaus were only selling dollars at a rate of 4.65 liras, the newspaper reported.

The lira slid to an all-time low of 4.98 against the U.S. currency early on Thursday before reversing those declines. It rose 1.6 percent to 4.8 per dollar at 12:22 p.m.

The lira has shed value since President Recep Tayyip Erdogan appointed his son-in-law, Berat Albayrak, as minister in charge of the Treasury and Finance Ministry earlier this week. The declines have revived concerns about a currency crisis in Turkey, sparked in May by Erdogan’s pledge to lower interest rates.

Albayrak sought to reassure investors on Thursday, telling the state-run Anadolu agency that the government is committed to lowering inflation to single digits and Turkey’s central bank is independent from political influence.

Erdogan maintains that higher interest rates cause inflation, disagreeing with conventional economic theory. He repeated a call for lower rates on Wednesday, sparking the lira’s latest decline. The currency has lost about 20 percent of its value this year.