Turkey’s central bank has not good reputation among investors. It is doing nothing or too little to move out from this bad situation. Turkish Lira seems like second Bitcoin before the fall, in opposite situation. President Erdogan really influences Turkish economy badly. He doesn’t let their Central Bank to do their own business. The Central Bank should be independent institution, but situation in Turkey is different. How long?
President Recep Tayyip Erdogan’s suggestion last week that he wants to tighten his grip on monetary policy has sent the Turkish currency sinking to record lows against the dollar. The bank, headed by Governor Murat Cetinkaya, warned investors who were betting against currency that it was ready to act. But he has failed to back that up with concrete measures, and that’s led to an even bigger sell-off. With the lira sinking more from day to day, some investors are warning that a market rout might snowball into a full-blown currency crisis, according to Bloomberg.com
Does Turkey even have a central bank anymore?” Timothy Ash, a strategist at BlueBay Asset Management in London, said in a Twitter post. “The time for the Turkish central bank action is now, or this will set Turkey back 20 years in terms of the economy.” This scenario would be horrible. He warns before the crisis.
In the beginning of May, the price for 1 USD was 4.06 TRY. Now on May 23, the currency pair is trading at 4.86 near the 2.618 Fibonacci. The biggest move was to the value 4.92. It was 21% depreciation for just one month.
Policy makers have a scheduled meeting on June 7. Charles Robertson, global chief economist at Renaissance Capital in London, is worried that Turkish authorities may be weighing something more drastic than a rate hike, according to Bloomberg.