Erdogan calls lira plunge a political ‘plot’
ANKARA — The plunge of Turkish lira is “a plot against Turkey” and the country will seek new partners and markets if the United States does not back down on its hostile policy, Turkish President Recep Tayyip Erdogan has said.
The dispute between the two NATO allies — which reached new intensity over the detention of a US pastor in Turkey — has hammered the lira and also raised questions over the future partnership between Washington and Ankara.
The already embattled Turkish lira tumbled about 16 percent to new record lows against the dollar on Friday as US President Donald Trump said he had doubled steel and aluminum tariffs on Turkey.
“There is no economic reason for the present (currency plunge) situation. This a plot to force Turkey to surrender in every field from finance to politics, to make Turkey and its people to kneel down,” Erdogan said.
“We will respond to those who declared a trade war on the entire world and included Turkey in it, by steering toward new alliances, new markets,” he said, raising questions over the future partnership between Ankara and Washington.
He also ruled out using interest rates to shore up the currency, which has lost more than 40 percent of its value since the start of this year, calling them “a tool of exploitation”.
The lira dived to a record low to the dollar at one point overnight before recovering slightly after the country’s finance minister said Ankara was planning to roll out an “action plan” on Monday in response to the crisis.
That was followed by the central bank announcing a raft of measures aimed at calming markets rattled by the precipitous plunge of the Turkish lira but the embattled currency came under new pressure in early trade.
‘Black Friday’
In its first statement since what was dubbed “Black Friday” in Turkey, the central bank said on Monday that it was ready to take “all necessary measures” to ensure financial stability, promising to provide banks with “all the liquidity” they need.
The bank also revised reserve requirement ratios for banks, in a move also aimed at staving off any liquidity issues. However, the statement gave no clear promise of rate hikes, which is what most economists and analysts say is needed to ease the crisis.
Meanwhile, Turkey’s foreign minister said on Monday that the US won’t achieve aims by exerting pressure and imposing sanctions on Turkey.
Addressing a conference in Ankara gathering Turkish ambassadors, Foreign Minister Mevlut Cavusolgu called on the US to “remain loyal to ties based on traditional friendship and NATO alliance” with Turkey.
Cavusoglu said: “We support diplomacy and negotiations but it is not possible for us to accept impositions.”
The Interior Ministry announced that it will take legal action against hundreds of social media accounts provoking the plummet of the lira.
The ministry said on Monday it initiated legal investigations against 346 social media accounts “which posted content provoking the dollar exchange rate”.
Multiple institutions on Monday issued similar warnings.