Turkish PM Erdoğan pledges to ‘choke’ speculators

ANKARA - Reuters

Speaking at a series of rallies in the capital Ankara after a week of the fiercest anti-government protests in years, Erdoğan blamed a ‘high-interest-rate lobby’ for causing volatility in financial markets, vowing to stop them. REUTERS photo

Prime Minister Recep Tayyip Erdoğan vowed on Sunday to “choke” financial market speculators who he said were growing rich off “the sweat of the people,” and urged Turks to put their money in state - rather than private - banks.

Speaking at a series of rallies in the capital Ankara after a week of the fiercest anti-government demonstrations in years, Erdoğan blamed a “high-interest-rate lobby” for causing volatility in financial markets and vowed to stop them.

“The lobby has exploited the sweat of my people for years. You will not from now on,” Erdoğan said to cheers from crowds of flag-waving supporters at Ankara airport. “Those who attempt to sink the bourse, you will collapse. Tayyip Erdoğan is not the one with money on the bourse. If we catch your speculation, we will choke you. No matter who you are, we will choke you,” he said.

Bent on high economic growth, especially ahead of an election cycle beginning next year, he accuses speculative investors in the capital markets - both domestic and foreign - of stoking volatility by seeking quick profit at the expense of Turkey’s longer-term economic health.

“I am saying the same thing to one bank, three banks, all banks that make up this lobby. You have started this fight against us, you will pay the high price for it,” he said, without indicating what action might be taken.

At a subsequent rally in Ankara, he urged people to use state banks, and rounded on some of Turkey’s largest companies that he also sees as part of the lobby, including the Koç , Doğus and Sabancı conglomerates.

Use ‘state’ banks, not private banks 

“You should put the high-interest-rate lobby in their place. We should teach them a lesson. The state has banks as well, you can use state banks,” he said.

Turkey’s financial markets were turbulent last week, as protests raged in cities around the country, and investors are preparing for more volatility this week as the uncertainty continues. Turkey’s five-year credit default swaps (CDS) rose to 172 bps, which is the highest since October 2012, according to Markit.

“It is strange that they are somehow trying to pin the blame for the protests on markets, and market participants, including foreigners,” said Timothy Ash, head of emerging markets research at Standard Bank.