Turkish lira pulls back from historic low

Turkish lira pulls back from historic low

Turkish lira pulls back from historic low

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ANKARA: The Turkish lira surged on Monday on expectations that President Recep Tayyip Erdogan was ready to walk back from his threat to expel 10 Western ambassadors over their statement of support for a jailed civil society leader.

The United States and several of the concerned countries issued identical statements on Monday saying they respected a UN convention that required diplomats not to interfere in the host country’s domestic affairs.

The Anadolu state news agency said Erdogan ‘welcomed’ the reassurance before heading into a cabinet meeting focused on what had threatened to become the most serious diplomatic crisis of his 19-year rule.

The lira pulled back from a historic low and was trading up half a per cent against the dollar on expectations that Erdogan would announce a compromise solution in a television address later on Monday.

He had originally threatened the ambassadors on Thursday and then doubled down, pronouncing the 10 envoys “persona non grata” in televised comments on Saturday.

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Political analyst Soner Cagaptay cited sources as saying the compromise would keep the 10 embassies in Ankara fully open while Erdogan refused “the ambassadors’ audition at his palace until (scheduled) replacements arrive in Ankara”.

A dollar now buys about 9.6 liras. The exchange rate stood at less than 7.4 liras at the start of the year and at 3.5 liras in 2017.

Turkey’s financial problems have been accompanied by an unusual spike in dissent from the country’s business community.

The Turkish Industry and Business Association issued a veiled swipe at Erdogan last week by urging the government to focus on stabilising the lira and bring the annual inflation rate under control which is now at almost 20 per cent.

Main opposition leader Kemal Kilicdaroglu accused Erdogan on Saturday of trying to “create false justification” for Turkey’s economic woes ahead of a general election due by June 2023.

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