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January 13, 2017

Turkey’s Erdogan equates lira fall to ‘terrorism’

Business

 
January 13, 2017

Ankara/Istanbul: President Recep Tayyip Erdogan on Thursday blamed a conspiracy aimed at weakening Turkey for the recent plunge in value of the lira, saying those who worked to pressure the currency were no different from a "terrorist".

The lira has plunged to record lows in recent weeks against the dollar, losing almost 10 percent in the last month alone and raising fears over the stability of the economy.

But addressing a meeting with loyal local officials in Ankara, Erdogan said: "There is no difference between the terrorist who has a weapon (and) a bomb and the terrorist who is using the dollar, the euro and interest rates for their purpose."

"The purpose is to bring Turkey to its knees. Theyre using the exchange rate as a weapon," Erdogan added.

Erdogan did not say who was to blame for the purported conspiracy, or if he was referring to foreign powers or private currency speculators.

Standard and Poor´s and Moody´s both downgraded the country´s credit rating to junk status in 2016.  And this week Moody´s warned the security situation was likely to weigh on the economy and cause a "general worsening of the investment climate", putting Turkey´s banks under pressure.

Analysts say investors are also increasingly worried about interference in monetary policy under Erdogan who has repeatedly pressured the central bank to lower interest rates.

Meanwhile, the lira has been put under strain by the string of terror attacks in Turkey, doubts about the sustainability of growth and worries about political instability as Erdogan drives for a presidential system.

After heavy losses in the last five days pushed it closed to the 4.0 ceiling against the dollar, the lira clawed back Thursday 2,0 percent against the greenback to trade at 3.8 lira to the dollar.

Meanwhile, Turkey will grant citizenship to those who invest or buy valuable property in the country, the Official Gazette said, as it tries to boost its flagging economy.

Passports will be granted to foreigners who buy at least $1 million of real estate in Turkey, invest at least $2 million, or deposit at least $3 million in an account, the Official Gazette said.

The announcement comes as the country battles a serious slide in the lira, with analysts saying the currency is taking a pounding because of a toxic combination of political and security uncertainty and economic woes.  In a similar move, last week Turkish President Recep Tayyip Erdogan said skilled Syrian and Iraqi refugees currently working on the black market would be granted citizenship if they pass security tests.

The European Union has called on Turkey to make it easier in general for Syrian refugees to find work, which would in theory make them less likely to come to Europe.

It is a key demand in negotiations over Ankara´s decade-long accession process to join the EU, as the bloc tackles the worst migration crisis since the Second World War.

At the end of 2015 Brussels and Ankara struck a deal whereby EU leaders pledged three billion euros ($3.2 billion) in aid for Syrian refugees on Turkish soil, while Turkey said it would stem the flow of migrants to Europe.  The bloc also agreed to end the visa requirement for Turkish visitors to the EU´s passport-free Schengen zone.

But in May a European Commission report acknowledged concerns criminals were plotting to get their hands on Turkish passports to get into the Schengen zone and carry out attacks.

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