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The pressure exerted by the Turkish economy continues and intensifies. Its currency and Turkish government bonds are plummeting and marking a record after the other. The cause is investors' concern for Erdogan's rigid control in economic and monetary policy now.
The Turkish president is now taking over indebtedness in his hands. At the same time, he entrusted the portfolio of the Ministry of Finance to his groom, Berat Albairaq.
Thus, yesterday, the Turkish lira, down 20% since the beginning of the year, experienced a new record lows against the dollar, in the afternoon the dollar s & # It was close to 4.80 Turkish liras. The continued depreciation of the pound poses risks for many Turkish companies, such as those in the energy sector, who have borrowed dollars and have trouble repaying their debts. At the same time, yields on 10-year Treasury bills reached 18.05%, up 54 basis points in just a few hours. On the Istanbul Stock Exchange, the main BIST 100 index finished yesterday with a loss of 1.7%, a day after the 3% drop recorded at Tuesday's session.
Falling badets of the neighboring country Accelerated yesterday as official data on the current account deficit were released, extending in May to $ 5.9 billion, exceeding economists' estimates of 5, $ 3 billion. This is because large deficits are the lingering scourge of the Turkish economy, making it vulnerable to investor moods and the possibility of a mbadive flight of foreign capital from the country. The problem is all the more acute as the US Federal Reserve raises the borrowing costs of the US economy, making US badets more attractive
. Along with the fall of Turkish badets, the climate of uncertainty underlines the new a warning from the S & P rating agency about the possibility of further deterioration of Turkey. Responding to the decision of the Turkish President to entrust his son-in-law with control of the Turkish economy, he stressed that he would closely monitor the neighboring country, because he notes that all powers are concentrated in the hands of Tayyip Erdogan. As Frank Guil, head of the economic badysts of this rating agency, said that changes in the political landscape put the neighboring country at the center of interest. "We are keeping a close eye on the country's fiscal situation," Gill said, noting that if the government continues to inject funds into the economy to prevent it of high interest, its level of debt would increase considerably. . Although he pointed out that such a development is not anticipated, the badyst refers to the very likely possibility that Erdogan will make new expenditures to maintain growth rates artificially high.
This is because the development of Turkey is expected to naturally slow down after recent dramatic increase in interest rates of the Turkish lira. Since April, the Bank of Turkey has raised its interest rates by 500 basis points, in an ineffective effort to put an end to the free fall of the pound and halt turbulent inflation. The reason is that in neighboring countries inflation reached 15.39% in June at the highest level of the last 14 years.
The Turkish president, however, defines himself as an "interest rate enemy" and has repeatedly pressed the central bank to keep the cost of borrowing low. Thus, despite the volatile level of inflation, there is considerable uncertainty as to how the central bank will move to its next meeting on July 24. In terms of Turkey's credit rating, S & P gave the rating of BB, which is lower than that of the other two big houses, Moody's and Fitch, while she did it. further degraded in May
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