Because of U.S. sanctions. A record fall in the Turkish Lira

Из-за санкций США. Рекордное падение турецкой лиры

The Turkish Lira continues to fall

The national currency of Turkey is pulled behind the ruble and the Euro. Erdogan invited partners, including Ukraine, to refuse calculations in dollars.

Turkish Lira depreciates stremitelno and updating historical lows against the background of deterioration in Turkey’s relations with the United States.

Leader Recep Tayyip Erdogan on the eve urged citizens to sell dollars and gold. He also suggested that the main trading partners, including Ukraine, to move to settlements in national currency.

Depreciating Turkish Lira pulled him and other currencies. The Central Bank of Turkey August 13, announced measures to protect financial stability. Корреспондент.net tells details.

 

USA dropped the lyre

The national currency of Turkey have fallen to a historic low last week. 10 August, the us dollar could buy 6,47 TL. The maximum fall with the opening of trading amounted to 14 percent.

13 Aug historic low was re-updated after the start of trading on Monday morning, the Lira exchange rate to the dollar reached 6.9 to the exchange rate of the Turkish currency fell another eight percent.

Then again Turkish Lira fell by a record against the dollar. Its rate reached a new historic low of 7.13 Lira per dollar.

Since the beginning of the week the exchange rate of the Lira fell by about 20 percent, and over the past 12 months – more than 40 percent, says Wall Street Journal.

The reasons for the depreciation of the Turkish Lira began growing political and economic contradictions with the United States. Relations worsened again on 1 August when the U.S. Treasury imposed sanctions against the Turkish justice Minister Abdulhamit Gul and interior Minister Suleyman Soylu.

Without gas and the F-35. The conflict between the US and Turkey

The reasons for the introduction of the first sanctions of the United States against a NATO member was the reluctance of Ankara to release the arrested in Turkey American pastor Andrew Brunson, suspected of links with the conspirators involved in the coup.

After the introduction of sanctions, the US took economic action against Turkey, increasing by half the duty on deliveries of a Turkish aluminium and steel.

“Duties on aluminium will be 20 percent, 50 percent for steel. Our relationship with Turkey is now bad!”, – announced the introduction of the measures the US President Donald trump.

 

The consequences for the whole world

The fall of the Lira has had a negative impact on the currencies of other developing countries. During trading on Monday, the exchange rate of the Rand to South Africa for a short time also dropped by about ten percent to the lowest in two years.

Also the dollar exchange rate exceeded 68 percent for April 2016. Still, the main factors pulling down the ruble, were sanctions of the USA and the purchase by the Bank of Russia of foreign currency to the Russian Ministry of Finance.

According to analysts, this is due to the fact that the situation in Turkey is forcing investors to withdraw from emerging markets.

In parallel, the dollar continues to strengthen against the Euro. On 10 August the Euro fell to its lowest level in a year against the U.S. dollar. The fall of the Euro was 0.6 per cent – for it gave a little more of 1.14 per dollar.

According to CNN, because Lira has a outstanding impact on world markets, shares of European banks faced particular pressure because of concerns regarding the susceptibility of the creditors of Turkey.

The European Central Bank has already expressed concern about the risk for the Spanish Bank BBVA, the Italian Unicredit and French BNP Paribas is due to the fact that they have major operations in Turkey, reported the newspaper Financial Times, citing sources.

In the review Goldman Sachs says that “from a fundamental point of view,” further consequences should be limited.

“If we continue to observe these effects in the markets with the best fundamental indicators, we will likely seek investment opportunities than in the lyre,” – said in the report.

 

As Turkey is saved

Due to the fluctuations of the national currency Erdogan urged Turkish citizens to immediately buy a lyre. Later, he promised to get rid of the dollar in foreign trade transactions with a number of economic partners – Ukraine, China, Iran and Russia.

According to the President of Turkey, if Europe wants to get rid of the “shackles” of the U.S., Ankara is ready to go with them on a similar trade settlement.

The Turkish Central Bank on 13 August announced measures to protect the financial stability of the country. Regulator to eliminate the threat to banks has decided to provide financial institutions with sufficient liquidity at the expense of its reserves.

In addition, the Bank opened for banks the possibility to obtain foreign currency loans for a period of one month. Simultaneously, the limit for Bank guarantees in foreign currency for transactions in Turkish Lira were increased almost three times from 7.2 billion euros to 20 billion.

Under certain conditions, the Central Bank permitted to exceed the limit of foreign exchange reserves for private banks, established at the level of 50 billion dollars..

In addition to financial measures to save the national currency, measures to protect the financial stability of the country began to accept and Turkish law enforcement. The Prosecutor’s office of Ankara on Monday, August 13, beginning an official investigation in connection with the engulfed the country’s financial crisis.

Из-за санкций США. Рекордное падение турецкой лиры

Erdogan urged to sell gold and dollars / EPA

According to the interior Minister of Turkey Suleyman Sola, who leads Reuters, the security forces will take “necessary measures” to combat the social media accounts that disseminate “provocative” information that weaken the Lira exchange rate.

According to him, the investigators have identified 346 accounts, publish record of the collapse of the Lira.

Moreover, the investigation started and the Office for investigation of financial crimes.

“MASAK beginning of the investigation in relation to individuals and legal entities that spread false news, such as, for example, the news that the government will intervene and convert foreign currency accounts in Turkish liras,” said the Ministry of Finance of Turkey.

 

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