Aug 14 2018

‘World of foreign currency’ turned into liras, Turkish CEO says

A “world of foreign currency” has been turned into liras as Turkey battles against a currency crisis that’s spreading through its economy, according to a local bank CEO.

Denizbank Chief Executive Officer Hakan Ateş said the bank is hearing news of such transactions, according to state-run Anatolia news agency.

Turkey’s lira rose 4.6 percent to 6.57 per dollar at 1:16 p.m. in Istanbul even after President Recep Tayyip Erdoğan signaled no end to a battle with the United States over Turkey’s internment of a U.S. pastor and 14 other Americans. Erdoğan declared that Turkey will carry out a boycott of U.S. electronic goods in response to a doubling of steel tariffs imposed by President Donald Trump on Friday.

The comments of Ateş followed news in the Arab press that Berat Albayrak, the son-in-law of Erdoğan who is now in charge of the economy, traveled to Kuwait on Sunday to appeal for funds to help shore up the lira. He met with his Kuwaiti counterpart at an airport in Kuwait City. The Kuwaiti government didn't immediately pledge any cash, according to a source who spoke to Ahval on condition of anonymity. It wasn't clear if Albayrak was visiting other Middle East allies, such as Qatar, during the trip.

Erdoğan has also called on Turkish citizens to turn their dollars into liras to help defend the currency.

Ateş encouraged Turks to not become part of the “speculation” in the currency markets, saying those with a right mind should not be selling liras when Turkish banks are offering such high returns on the money.

The lira has slumped more than 40 percent this year, including losses of about a quarter over the past two weeks, as the crisis with the United States, which was preceded by spats over a Turkish invasion of Syria and the U.S. trial of a Turkish banker, showed no signs of de-escalating.

Emirates NBD, Dubai's biggest bank, bought Denizbank from Russia's Sberbank for $3.2 billion in May.