ISTANBUL: The Turkish lira touched a new low against the dollar and shares also slid yesterday, under pressure from a corruption scandal roiling the government.
The lira fell to 2.1740 after earlier hitting a record low of 2.1828 to the dollar while the main Istanbul stock exchange index lost 1.20 percent to 66,985.81.
Turkey’s financial markets have tumbled on political jitters with Prime Minister Recep Tayyip Erdogan’s government rattled by a corruption probe that has targeted several key allies. Although Turkish leaders have sought to play down the impact of the crisis on the once fast-growing emerging economy, analysts warned that investors have taken flight.
The lira’s continuing fall is despite a central bank decision last week to sell off some of its dollar reserves to shore up the currency, which has also been hit by the scaling down of the US monetary stimulus policy.
The bank had said it planned to inject $450m daily until the end of January.
Deputy Prime Minister Ali Babacan insisted that the impact of the political crisis in Turkey was temporary. “It is a temporary situation. It is to do with the political perception,” Babacan told a business conference in Ankara.
He had said on Tuesday that the government’s economic growth forecast for 2014 remained at four percent despite the turmoil.
Babacan also claimed that state-owned Halkbank, whose boss has been charged with involvement in illegal gold sales to sanctions-hit Iran, was the target of a “smear campaign”.
Economy Minister Nihat Zeybekci said stock market losses alone had reached $50bn since the bribery probe hit the headlines with mass arrests in mid-December. Deputy Prime Minister Bulent Arinc on Monday put the cost of the political turmoil at $100bn.
AFP
