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Turkish Lira Falls to Historic Low, Calls to Sell Dollars Fail to Reassure Investors | ASHARQ AL-AWSAT English Archive 2005 -2017
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Turkey’s lira headed on Friday for its sharpest weekly fall since the repercussions of a failed coup last July, as the central bank’s endeavors to fix liquidity and calls from President Tayyip Erdogan for Turks to sell dollars did not succeed to reassure investors.

The lira shed more than one percent against the dollar by 0840 GMT, even after the central bank attempted to bolster the money for a second day by not opening the one-week repo auction through which it funds the market.

“By not opening a one-week repo auction again today the central bank is proceeding with (hidden) monetary tightening,” said Is Investment business analyst Muammer Komurcuoglu.

The lira has lost up to 10 percent infront of the dollar since the beginning of 2017, marking the worst-performing major currency of the new year.

The currency has lost on Wednesday almost a quarter of its value in the six months since the failed coup attempt on July 15.

The central bank must put higher interest rates to prevent further falls, according to economists.

Economy Minister Nihat Zeybekci told the state-run Anadolu news agency on Friday that growth in 2016 was around three percent.

The latter stated that the central bank enjoys plenty of means to counter speculative moves in the lira, although he added that it would be wrong for it to intervene by directly selling forex.

“In the period ahead we will see the lira returning to a normal trend as hope in the speculative moves is lost,” he said.

Erdogan accused Turkey’s enemies on Thursday of using currency speculation to try to topple the state and urged the central bank to “thwart these games”, saying it had all the tools it needed.

He repeated his call to Turks to sell foreign currency, urging a “sense of national mobilization.”