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Erdogan warns Turkish Lira nears JUNK STATUS

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Erdogan warns Turkish Lira nears JUNK STATUS

PostAuthor: Anthea » Sat Aug 18, 2018 8:01 pm

Erdogan warns those 'playing games' as lira nears JUNK STATUS

The defiant leader hit out a day after ratings agencies Moody's and Standard & Poor's downgraded Turkey closer to junk status amid the currency crisis. Mr Erdogan said: "Today some people are trying to threaten us through the economy, through interest rates, foreign exchange, investment and inflation.

"We are telling them: we've seen your games, and we are challenging you."

And in a thinly-veiled swipe at Donald Trump and the US he added: "We did not and will not surrender to those who act like a strategic partner but make us a strategic target.”

Standard & Poor's downgraded the rating by one notch to B+ from BB-, citing extreme lira volatility and forecast a recession next year.

It said: "The downgrade reflects our expectation that the extreme volatility of the Turkish lira and the resulting projected sharp balance of payments adjustment will undermine Turkey's economy. We forecast a recession next year.”

It also forecast that inflation will peak at 22 percent over the next four months and said the weakening lira was putting pressure on the indebted corporate sector and had considerably increased the funding risk for Turkey's banks.

S&P said: “Despite heightened economic risks, we believe the policy response from Turkey's monetary and fiscal authorities has so far been limited.”

The lira has lost 40 percent of its value against the dollar this year with investors fearful of Mr Erdogan's influence over monetary policy.

Recep Tayyip Erdogan has taken a defiant stance despite the Turkish lira crisis

Heavy selling in recent weeks spread to other emerging market currencies and global stocks and deepened concerns about the economy, particularly Turkey's dependence on energy imports and whether foreign-currency debt poses a risk to banks.

The embattled lira fell three percent yesterday after a Turkish court rejected a US pastor's appeal for release, drawing a stiff rebuke from Mr Trump, who warned the US would not take the detention of Andrew Brunson "sitting down".

The case of Mr Brunson, an evangelical Christian missionary from North Carolina who has lived in Turkey for two decades, has become a flashpoint between Washington and Ankara and accelerated a widening currency crisis.

Mr Trump said: "They should have given him back a long time ago, and Turkey has in my opinion acted very, very badly. "So, we haven't seen the last of that. We are not going to take it sitting down. They can't take our people."

Mr Trump's comments came after a court in Izmir province rejected an appeal to release Brunson from house arrest, saying evidence was still being collected and the pastor posed a flight risk, according to a copy of the court ruling.

Mr Brunson is being held on terrorism charges, which he denies. Mr Trump, who counts evangelical Christians among his core supporters, has increasingly championed the pastor's case. ... unk-status
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Erdogan warns Turkish Lira nears JUNK STATUS



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