Thursday, January 12, 2017

Turkish Lira crashes, investors flee from Turkey –

The Turkish currency, the Turkish Lira crashes. Since the failed coup attempt in Turkey in the summer, she has lost around 30 percent of their value. Due to political turmoil and terrorist attacks, investors in droves to withdraw their money out of the country on the Bosporus.

Now ambitious plans of the head of state Recep Tayyip Erdogan to even more uncertainty and drive the Lira to new record lows. The Central Bank looks to be powerless.

Since the beginning of the year rustles the Turkish Lira always faster downhill – and the Euro is rising (see EURTRY). Losses in value of more than two percent in a day are not peculiar, on Wednesday, the currency was so weak as never before. Meanwhile, the Turks have to shell out more than four Lira, in order to receive a Euro – in the summer, more than three Lira.

“A stabilization or even a counter-movement is not in sight,” says Manuel Schimm, expert at the Bayerische Landesbank. Also in this year, the Lira for investors will remain extremely unattractive.

uncertainty continues to

Although the currency is already in the failed coup attempt in July 2016, significantly under pressure. But now, the uncertainty of investors due to new Worries about the political development in Turkey. Because in the Parliament in Ankara these days is a vote on one of Erdogan’s intended reform of the Constitution.

The head of state wants to introduce a presidential system, and thus his Power still further. The first two of 18 articles have been approved by the deputies on Wednesday night for the time being. At the end is the vote of the people. Large parts of the Opposition are up in arms against the Reform, and warning of a “dictatorship” in Turkey.

Nothing but investor fear in financial markets more than a unpredictable head of state, the exercise can be as he wants. The Lira device to the Reel, the Turkish Central Bank looks on, apparently powerless. Although she has her against the Lira weakness, by allowing domestic banks to sell more dollars.

Previously, had bunkers, the money houses higher Dollar holdings as security. But this is neither the right tool nor is it from the rich, criticized Tatha Ghose, an expert at Commerzbank.

sound More desperate than thought out

Also Appeals to Erdogan, the Turks should get your currency under your pillow, and to the Bank, desperate, rather than a thought-out strategy. On the duration of the Central Bank will increase interest rate or not, says Ghose.

The Problem is, however, Higher interest rates, the Turkish economy is threatened even further for the wealthy. Therefore, Erdogan sits the custodians in the neck. Already, on several occasions, the state has demanded chief even reductions in interest rates.

Although he is not officially the independence of the Central Bank in question. As President he had the right to criticise. “Because I’m the one that gets in front of his people the slap in the face, not the Central Bank-bureaucrat”, as its Argument.

economy for the first time since 2009

And Erdogan’s now shrunk to Concerns about the economy come about by chance. The Turkish economy contracted in the third quarter of 2016 for the first time since the crisis year of 2009. Especially, the tourism sector suffers. One of the most popular travel destinations of the Germans in the Chaos, fear visitors will stay away, the Hotels are empty. For this year, the Turkish government has lowered its growth forecast for the economy of 5.0 to 4.4 percent.

To top it all, has to fight the Turkey already for a long time with a chronic current account deficit. Since the turn of the Millennium, the country exported nearly constantly much less than it imports.

This makes Turkey particularly vulnerable in a downturn in the currency, as imports become more expensive. The fuelling Inflation. Finally, the inflation rate was a whopping 8.5 percent. For the Turks, this means that For the same money in the wallet and bag.

And even if the Central Bank raises against the will of Erdogan’s interest, is not sure if she can stand against the Lira weakness. Doubts were reinforced in November, when the Central Bank raised for the first time since the beginning of 2014 the key rate to the current level of 8 percent. The Lira was able to support only temporarily, they soon fell. The dangerous medicine had been administered, but the disease remained – much to the Annoyance of Erdogan.


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