Investing.com – Turkey is on the verge of facing a new monetary crisis, the lira has fallen to its lowest level for nearly a year after the electoral authorities of the country declared the results of the last municipal elections in Istanbul.
This decision has triggered protests immediate in the streets of the largest city in Turkey against the government of president Recep Tayyip Erdogan, and pushed the Dollar to 6,1976 Lire Tuesday. This is the highest level since last September, when the increase of the dollar interest rate and the length of the repayment schedule of the external debt threatened to bring down the banking system of the country.
The central bank has had to face significant interest rate to defend the Turkish lira at this time. The economic challenges that have occurred since then have contributed to the AK party of Erdogan losing the control of the three largest cities of Turkey in the elections of march. His critics accuse him now of having used the State apparatus to overturn a legitimate election.
The Turkish lira has dropped by 2% immediately after the news and still has lost 1.5% since then. At 11: 00 am, the reading was to 6,1631 for a dollar, which has now increased by 16.3% against it this year. This makes it the worst performance of all currencies of the G-20, with the exception of the argentine Peso.
“Erdogan, an islamist policy, once said: “democracy is like a streetcar: hop aboard and get off when you see fit.” Today, it is out of this tram,” said Soner Cagaptay, director of Turkish at the Washington Institute via Twitter.
On other markets, the Aussie has rebounded strongly after the Reserve Bank of Australia has left its key rate at 1.5 percent, disappointing many who were hoping for a rate reduction.
The Dollar index, which measures the greenback against a basket of six major currencies, stood at 97,155, down 0.1%.
Investors still do not know what conclusions to draw from the american decision – confirmed last Monday to impose additional duties on chinese imports after it accused the country of going back on the commitments that it had made during earlier negotiations on the resolution of the trade war.
“These trade talks are for us a black box and we’re only a tweet of chaos,” said Bloomberg Joerg De Vries-Hippen, CIO european equities at Allianz Global Investors.
China announced on Tuesday that the vice-Prime minister Liu He would in spite of everything in the United States to participate in the discussions planned for this week.
The british Pound was rising, while the first minister, Theresa May, would be on the point of concluding an agreement with the leader of the labour party, Jeremy Corbyn, which would exclude the Uk from the EU without the need for a second referendum. It is still not clear if the agreement, which would require the United Kingdom to join a customs union with the European Union, can gather enough support from mps back ban of two parties to be adopted in parliament.
Despite everything, the Euro crossed the bar 1,1200 dollars this night and retains the bulk of its gains, despite another series of disappointing factory orders in Germany. At 11: 00, it was 1,1209 dollar.