The Turkish economy may be as “strong as a rock,” according to the government’s top economic team, but the performance of the country’s currency and Istanbul bourse Tuesday suggested that the fragility caused by the Western debt crisis was continuing to affect the nation.
“We see that Turkey’s economy is totally sound. It is sound and strong like a rock. There is no problem,” Economy Minister Zafer Çağlayan said before an assessment meeting headed by Prime Minister Recep Tayyip Erdoğan.
Because Turkey is a global actor, it can be affected by global developments, Çağlayan said. “Our institutions, the BRSA [the banking regulator] and Central Bank are working. We are working to make the country more powerful,” he added.
“Turkey is on a firm footing, but it is not an island,” Finance Minister Mehmet Şimşek said before the meeting. “We were affected to some extent in 2008-2009, but lasting damage was not experienced.”
Still, Tuesday figures contradicted the ministers’ comments as the Istanbul Stock Exchange, or ISE, continued to lose before a rise a few hours before closure.
The value of the bourse’s main ISE 100 Index fell by 2072.46 points, or above 4 percent, to 49,493 at 11 a.m., bringing its five-day decline to 19 percent.
Investors have withdrawn money from Turkish equities as global economic uncertainty heightens concern the country will be unable to manage its record current-account deficit and weakening Turkish Lira.
The index increased by 1.3 percent on Tuesday compared to the opening, closing at 52,961 points.
The bourse is following trading in shares closely after recent falls and has implemented rules governing short-selling, according to a filing Tuesday.
The euro and the U.S. dollar continued to lose Tuesday despite a slight increase after the Central Bank cut its lending rate for deposits in dollars and euros Tuesday to help boost foreign exchange liquidity.
The U.S. dollar was trading at 1.776 liras, up from 1.758 a day earlier. The euro climbed to 2.528 liras, up from 2.492 liras on Monday.
The bank in Ankara lowered the lending rate in dollars to 4.5 percent from 5.5 percent and the rate in euros to 5.5 percent from 6.5 percent, according to an emailed statement.
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Source : hurriyetdailynews.com
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