Turkey

The Turkish currency sank to a record low, weighed down by concern that monetary policy remains too loose to curb accelerating inflation, Bloomberg News reported. The lira slid as much as 1.1% to 8.5981 per dollar, poised for a third daily decline this week. The losses were compounded as local accounts bought dollars ahead of large foreign-currency debt repayments, according to two traders who asked not to be named as they are not authorized to speak publicly. Turkish lira hits an all-time low against U.S.
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President Recep Tayyip Erdogan is set to announce a new relief package for Turkey’s small businesses hit by the global pandemic, in a bid to help a key part of his electorate affected by coronavirus lockdowns, Bloomberg News reported. The government is finalizing the details of the 5 billion-lira ($598 million) loan package that will be announced following Monday’s cabinet meeting, according to a circular shared by authorities with lenders that’s seen by Bloomberg. The ministry of trade and Erdogan’s office both declined to comment.
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Turkey’s central bank kept its benchmark interest rate unchanged for a second meeting on Thursday, pledging to maintain its “current” policy stance until there’s a significant drop in inflation, Bloomberg News reported. The Monetary Policy Committee left its key rate at 19% as forecast by all analysts in a Bloomberg survey. Inflation accelerated for a seventh month in April to 17.1%, spurred on by a weak lira and rising global energy prices. But new bank Governor Sahap Kavcioglu predicted the pace of price gains had peaked and would now start dropping to 12.2% by the end of 2021.
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One of Turkey’s largest cryptocurrency exchanges said it lacked the financial strength to continue operations, leaving hundreds of thousands of investors fearing their savings have evaporated as authorities sought to locate the company’s 27-year-old founder, who fled the country, Bloomberg News reported. Confusion reigned about how many users of the Thodex exchange were affected and how much money was at stake. In a statement from an unknown location, Thodex Chief Executive Officer Faruk Fatih Ozer promised to repay investors and to return to Turkey to face justice after he did.
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Turkey is re-introducing weekend lockdowns in most of its provinces and will also impose restrictions over the Muslim holy month of Ramadan following a sharp increase in COVID-19 cases, the Associated Press reported. Infections in Turkey have soared less than a month after authorities divided the 81 provinces into four color-coded categories and relaxed restrictions in some provinces under a “controlled normalization” effort. The number of infections hit a record on Tuesday, with the Health Ministry confirming 37,303 new cases in the past 24 hours.

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Turkey’s currency tumbled almost 8% on Monday, putting it on course for its biggest single-day selloff since 2018, following the abrupt ouster of the central-bank governor last week, the Wall Street Journal reported. The lira fell to as low as 8.280 a dollar from 7.219, before regaining some ground to trade at about 7.7865 a dollar, according to FactSet. Turkey’s stocks also plunged.
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Turkey’s sovereign wealth fund is sounding out global banks on refinancing its only syndicated loan as the institution emerges from a shakeup this week, Bloomberg News reported. The fund, known as TWF, is in talks to refinance a 1 billion-euro ($1.2 billion) loan it drew in March 2019 and which matures in five days. Abundant global liquidity and the government’s guarantee on 95% of the facility will likely help the sovereign investor close the deal.
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Turkey’s small businesses warned President Recep Tayyip Erdogan that ending pandemic support could deliver a severe drop in income for workers and major job losses if firms go bankrupt, Bloomberg News reported. Erdogan said last week that government payments to employees whose place of work has been partially or fully shut by the health emergency will be given “for the last time at the end of March.” A ban on redundancies will be retained, but the changes set alarm bells ringing for the small and medium-sized firms which employ nearly 74% of Turkey’s total workforce.
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Turkey’s central bank left its benchmark interest rate unchanged at 17% at the first monetary policy meeting of the year, pledging to keep it elevated for an “extended” period, Bloomberg News reported. The lira rose. The Monetary Policy Committee’s decision was in line with the forecasts of most analysts in a Bloomberg survey. The dissenters, including economists at Morgan Stanley and Societe Generale SA, had predicted an increase of 50 to 100 basis points.

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