Erdoğan: You can’t hit us with exchange rates

ISPARTA

Turkey’s President Recep Tayyip Erdoğan on May 27 responded to opposition groups’ criticisms over the Turkish Lira’s weakness against the steep fluctuation of foreign exchange rates last week.

“Some are talking about exchange rates and whatnot. Leave these aside. You cannot hit us with exchange rates. You cannot hit us with manipulations,” said Erdoğan, speaking at a campaign rally in the western province of Isparta.

His remarks came one day after he called on citizens to change their foreign currency to the lira to help prop up the embattled currency.

“My brothers, could those of you who have euros and dollars under their pillows invest their money in liras?” he said in the eastern province of Erzurum.

The lira has lost 16 percent of its value against the greenback in a month.

The lira hit 4.92 against the dollar on May 23 before paring back some of its losses later this week after an emergency Central Bank rate hike.

Ankara has repeatedly said the lira’s fall was a “conspiracy” by unnamed foreign powers to weaken Turkey.

“If the financial sector plays such games to work against our investors and entrepreneurs, know that you will pay a steep price,” Erdoğan said on May 26.

Deputy Prime Minister Mehmet Şimşek said on May 25 that the Central Bank was capable of taking action against speculative attacks amid the recent volatility in foreign exchange rates.

“Its hands are not tied [...] It will do what is necessary,” Şimşek said in a televised interview on private news channel NTV.

He also said the bank had the full support of the government, adding that its decision to hike interest rates on May 23 in order to support the lira had proved its independence.

“The Turkish Central Bank has taken a strong step that had immediate effects [on the market],” Şimşek said.

On May 23, the Central Bank hiked late liquidity window interest rates, namely the lending rate raised from 13.50 to 16.50 percent while the borrowing rate was kept at 0 percent. On May 25, the bank fixed foreign exchange rates for rediscount credit repayments for export.

Erdoğan also accused the opposition candidates and parties of being destructive instead of developing constructive projects.

“One says ‘we will not go ahead with Canal Istanbul.’ The other one says ‘we will stop the investments.’ ‘You have no budget,’ they say. You don’t understand this business. Economy is our business. We did these investments by diversifying the resources. Whatever they say, we will continue the investments,” said Erdoğan. 

The Kanal Istanbul megaproject seeks to build a Bosphorus-like channel cutting through Istanbul’s European side to boost naval traffic from the Black Sea to the Marmara Sea, effectively turning the European side of Istanbul into an island.

The main opposition Republican People’s Party’s (CHP) candidate, Muharrem İnce, pledged to abandon the project.