Turkey’s lira tumbled on Thursday after a rally triggered by a shakeup of the economy team in November as the government again defended the record of former finance minister Berat Albayrak and speculation brewed over his possible return to the cabinet, Reuters reported.
The currency was at 7.248 against the dollar at 1621 GMT after having reached 7.25, its weakest level in more than three weeks.
According to observers a slump in the US greenback indicated the currency’s negative outlook since the lira shed nearly 5 percent in three days despite the USD’s fall.
Dealers said the selloff was triggered by President Recep Tayyip Erdoğan’s defense of his son-in-law Albayrak, who abruptly resigned in November amid an overhaul of the economic leadership. Albayrak presided over an unorthodox policy that depleted Turkey’s FX reserves.
Since his departure, the central bank under new Governor Naci Ağbal has hiked interest rates sharply, with the lira rallying by 20 percent.
But that fizzled when Erdoğan said on Monday and again on Wednesday that the FX reserves — a country’s buffer against financial crisis — were reduced under Albayrak to help the economy through the pandemic last year.
Albayrak’s possible re-appointment as a cabinet minister had recently been discussed inside the ruling Justice and Development Party (AKP), and a final decision could be made at a party convention in coming weeks, Reuters said, citing an AKP official.
“Some are sure that he will be appointed energy minister, but Erdoğan will decide. There are also those in the party that say this is not possible,” the Reuters quoted the official as saying.
The currency shed about half its value during Albayrak’s two years as finance minister, in which state banks sold some $130 billion in dollars in FX markets to support the lira.
Opposition leader Ali Babacan, chair of the Democracy and Progress Party (DEVA) and a former economy minister, said in September that the government’s poor management is to blame for the “evaporation of $120 billion in reserves.”
Adding to the lira’s fragility, Turks hold near-record levels of hard currencies as a hedge against double-digit inflation.
Turks still cling to their FX, precious metal holdings
Turkish locals’ forex and precious metals holdings stood at $234.73 billion in the week ending Feb. 19, according to central bank data that came on Thursday.
The FX holdings reached a record high of $236.11 billion in January, underlining Turks’ efforts to hedge against double-digit inflation and an ailing lira, which lost 20 percent of its value against the dollar last year.
Data also showed on Thursday that foreign investors bought $194.5 million worth of Turkish government bonds in the week to Feb. 19 and sold $122.8 million worth of stocks.
Separately, data showed the central bank’s gross forex reserves rose to $53.86 billion in the same period from $53.72 billion a week earlier.
The post Speculation over possible Albayrak return sends lira tumbling appeared first on Turkish Minute.
from Turkish Minute https://www.turkishminute.com/2021/02/25/possible-albayrak-return-sends-lira-tumbling/
Hiç yorum yok:
Yorum Gönder