Turkish Finance Minister, Berat Albayrak, assured international investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting the country’s banks were healthy and signalling it could ride out a row with the United States.
In a conference call with thousands of investors and economists, Albayrak – who is President Tayyip Erdogan’s son-in-law – said Turkey fully understood and recognised all its domestic challenges but was dealing with what he described as a market anomaly.
With Ankara locked in a complex dispute with Washington, he also played down a decision by President Donald Trump to double tariffs on imports of Turkish metals.
Many countries had been the target of similar U.S. trade measures, he said, and Turkey would navigate this period with other parties such as Germany, Russia and China.
The Turkish lira hit a record low of 7.24 to the dollar this week, down 40 per cent this year, as investors fretted over Erdogan’s influence over monetary policy and the dispute with the United States.
Facing Turkey’s gravest currency crisis since 2001 in his first month on the job, Albayrak has the daunting task of persuading the investors that the economy is not hostage to political interference.
Albayrak, a 40-year-old former company executive with a doctorate in finance, said Turkey would not hesitate to provide support to the banking sector. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.
Before he spoke, the lira strengthened more than 3 per cent, despite signs that the rift with the United States is as wide as ever.
However, the currency market’s reaction to his conference call – in which he also said Turkey had no plans to seek help from the International Monetary Fund or impose capital controls to stop money flowing abroad – was measured.
After he finished speaking, the lira was little changed from beforehand, meaning it remained down around 34 per cent against the dollar this year.
However, it later made marginal gains, taking it back to where it was earlier in the day as the currency shrugged off U.S. comments ruling out the removal of steel tariffs on Turkey, even if it frees an American pastor who lies at the centre of the feud between Washington and Ankara.
Erdogan has repeatedly told the Turks to exchange gold and hard currency into lira, saying the country was involved in an economic war with enemies.
However, Turks appeared not to be heeding his appeal. Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier.
Erdogan has called for a boycott of U.S. electronic goods and Turkish media have given extensive coverage to anti-U.S. protests, including videos on social media showing Turks apparently burning dollar bills and destroying iPhones.