Turkey’s ailing economy on Monday was further struck by the effects of President Recep Tayyip Erdoğan doubling down on his unorthodox low-rates policy, citing Islam’s doctrine on interest.
The lira tumbled to a fresh record low against the dollar euro on Monday, while the country registered a hike in oil prices amid a call from Erdoğan’s chief advisor to revive a nationalist manifesto dating back to 1920, citing the influence of “foreign forces’’ over the currency.
The currency on Monday tumbled to 18.27 against the dollar, some 10 percent weaker from Friday’s close, after Erdoğan on Sunday vowed to continue to keep interest rates low.
“Don’t expect anything else from me,” the Turkish leader said on the weekend, highlighting his Islamic duty to uphold the religion’s anti-usury stance.
The Turkish currency has depreciated by nearly 60 percent against the dollar since the start of the year while annual inflation has accelerated to 21 percent.
Erdoğan maintains high interest rates cause inflation, a belief that contradicts conventional economic thinking, and is believed to have pushed the central bank to cut key interest rate by 5 percentage points, to 14 percent, since September.
(All times are local Turkish, GMT + 3)
20:10 – Turkey’s stock exchange closes Monday with losses, circuit breakers
Borsa Istanbul, Turkey’s stock exchange, closed with losses on Monday, in a day which was marked by circuit breakers, Sözcü newspaper reported.
Trading of equities, equity derivatives and debt repo transactions were automatically halted twice within an hour, it said, referring to a move by stock exchanges to ease panic selling by taking certain steps to halt trading.
The BIST 100 index, which opened the day at 2,007.04 points, dropped 28.11 points, or 1.35 percent, from its previous close. The benchmark stock index finishing with losses for the second trading day in a row, closing at 2,056.36 points.
20:00 – Tens of local Turkish TV stations facing closure
Tens of local TV stations are facing closure on January 1st, 2022 unless they are able to negotiate payments to state-owned Türksat A.Ş. Satellite telecommunication, Duvar news site reported.
The plunge in the lira has sparked a doubling of the monthly Türksat bills of 39 local channels, the website said, who have decided they will pull the plug on their stations unless a solution is found.
A total of 1,200 are employed at the TV stations located throughout the country, according to Duvar.
19:30 – Lira hits fresh low against dollar, euro
Turkey’s lira slouched to new lows against the euro on Monday, hitting a record low of 20.0581 against the currency, Reuters reported.
Minutes later, the currency tumbled to an all-time low of 18.27 against the dollar, down from 17.5 earlier on Monday.
The Turkish currency has depreciated by nearly 60 percent against the dollar since the start of the year.
19:15 – Turkey hikes oil prices
Turkey on Monday hiked oil prices, with gasoline, diesel fuel and liquified petroleum gas prices going up by 62, 55 and 57 kurush per litre, respectively, Sözcü newspaper reported. The price hike will go into effect as of midnight on Monday, it said.
19:00 – Senior Erdoğan advisor calls for revival of decades-old ‘National Pact’
Turkish President Recep Tayyip Erdoğan’s senior advisor Yiğit Bulut on Monday accused “foreign forces’’ of being behind the record-breaking tumble of the lira, calling for the nation to adopt a six-article nationalist manifesto dating back to 1920.
“If the global imperial structure continues to attack the Great Turkish nation like this in every sphere, then the great Turkish nation will return to the boundaries of the Misak-ı Milli (National Pact),’’ Bulut said on Twitter, in reference to a set of decisions, which the founder of modern Turkey, Mustafa Kemal Atatürk, adopted as the main principles of Turkey’s independence.