Forex used as weapon against Turkey: Erdogan

Erdogan went on claiming "troubles and problems" in Turkey could not be the explanation for the weakening Lira which gathered itself to a rate of 3.76 against USD.

ERBIL, Kurdistan Region (Kurdistan24) - Turkey's President Recep Tayyip Erdogan declared on Thursday that foreign exchange market (forex) was a "weapon" used against his country, as Turkish Central Bank tries to halt Lira's sharpest fall since the weekend.

"You now know that economy is used to attack Turkey. There is no difference between the aim of a terrorist who holds a weapon and that of a terrorist who has Dollars, Euros, and interest," Erdogan told several hundred mukhtars or heads of neighborhoods from around Turkey, according to Kurdistan24 Ankara Bureau.

Low growth rates, rising inflation and decline in Turkish Lira's (TRY) value against foreign currencies in international exchange markets in recent months have all contributed to grim expectations for Turkish economy in 2017.

"They are trying to steer Turkey away from its objectives. They are using forex rates as a weapon," said Erdogan without clarifying whom he meant about a pattern in the USD-TRY parity that has seen record level fresh all-time lows of down to 3.94.

Erdogan went on claiming "troubles and problems" in Turkey could not be the explanation for the weakening Lira which gathered itself to a rate of 3.76 at the time of writing this report against USD after the Central Bank decided not to open its one-week repo auction in the morning for the first time since 2009.

Pro-government media and Erdogan himself last month launched a campaign telling people to exchange Dollars for Lira when the parity was still less than 3.50 in the hope of preventing the latter from further plunging down.

Turkish Lira started its latest decline on Monday as the Parliament began debating a constitutional reform package that if approved by voters in a referendum will transfer cabinet's powers to the President.

Terror attacks in Istanbul and elsewhere that killed hundreds over the past year have also added negativity to the financial outlook of Turkey.

On Tuesday, the World Bank revised its forecast of Turkey's 2017 GDP growth rate from 3.5 to 3 percent in its Global Economic Prospects report.

 

Editing by Ava Homa