President Recep Tayyip Erdogan on Thursday blamed a conspiracy aimed at weakening Turkey for the recent plunge in value of the lira, saying those who worked to pressure the currency were no different from a "terrorist". The lira has plunged to record lows in recent weeks against the dollar, losing almost 10 percent in the last month alone and raising fears over the stability of the economy.
But addressing a meeting with loyal local officials in Ankara, Erdogan said: "There is no difference between the terrorist who has a weapon (and) a bomb and the terrorist who is using the dollar, the euro and interest rates for their purpose." "The purpose is to bring Turkey to its knees. Theyre using the exchange rate as a weapon," Erdogan added. Erdogan did not say who was to blame for the purported conspiracy, or if he was referring to foreign powers or private currency speculators.
Standard and Poor's and Moody's both downgraded the country's credit rating to junk status in 2016. And this week Moody's warned the security situation was likely to weigh on the economy and cause a "general worsening of the investment climate", putting Turkey's banks under pressure.
Analysts say investors are also increasingly worried about interference in monetary policy under Erdogan who has repeatedly pressured the central bank to lower interest rates. Meanwhile, the lira has been put under strain by the string of terror attacks in Turkey, doubts about the sustainability of growth and worries about political instability as Erdogan drives for a presidential system. After heavy losses in the last five days pushed it closed to the 4.0 ceiling against the dollar, the lira clawed back Thursday 2,0 percent against the greenback to trade at 3.8 lira to the dollar.
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