Erdoğan adviser warns against financial crisis talk

Turkish President Recep Tayyip Erdoğan’s senior economic adviser warned his readers in an editorial to ignore scaremongering about a financial crisis in the country.

Yiğit Bulut, a former TV anchorman, said “certain persons and media groups” were systematically attempting to create the impression that Turkey had entered a crisis or was about to. “DEFINITELY DO NOT PAY ATTENTION TO THIS!” Bulut wrote in his regular column for Star newspaper.

Bloomberg, local news channel NTV and renowned Turkish economist Mafi Eğilmez were among the culprits, he said, adding that the campaign was a continuation of the failed military coup of July 15, 2016.

Turkey’s lira has slumped to record lows against the dollar, leading a rout in emerging market currencies, after the central bank, under political pressure from the government ahead of presidential and parliamentary elections on June 24, failed to step in and raise interest rates. Last week, the bank said it was monitoring currency movements and would make the necessary steps, taking into account their impact on Turkey’s inflation rate.

Bulut proceeded to list a history of economic events in Turkey since 1946, when the country first allowed in foreign investment, Including a series of currency devaluations, growth rate statistics and International Monetary Fund programmes.

The foreign loans of Turkish corporates, which exceed $226 billion, or 30 percent of gross domestic product, a current account deficit that's widened to more than 6 percent of economic output and double-digit inflation have all been cited by economists and commentators as particular weaknesses of the Turkish economy.

Erdoğan, who reiterated last week that higher interest rates are inflationary, is seeking re-election in snap polls he called for June 24. His government has implemented a succession of measures to stimulate growth ahead of the election, prompting ratings agencies and the IMF to warn of a hard landing for the economy.

The lira was little changed at 4.5770 per dollar at 9:30 a.m. in Istanbul on Tuesday, just off a record low of 4.5999.