Last month, the lira fell nearly 6 percent in one day because of investor concerns over foreign reserves and also worries the government had turned to unorthodox ways to shore up the currency before March 31 elections (Amir MAKAR)
Istanbul (AFP) – Turkey’s President Recep Tayyip Erdogan on Thursday criticised Western media coverage of the country’s economy after a Financial Times report questioned the central bank’s management of foreign currency reserves.
Turkey’s economy has slipped into its first recession in a decade after a currency crisis last year battered the lira, leaving foreign investors jittery over the government’s policies to manage growth.
The Financial Times on Wednesday reported that the central bank had bolstered its foreign reserves with short-term lending in what analysts worried was a way to overstate its buffer against any new lira crisis.
Last month, the lira fell nearly six percent in one day because of investor concerns over foreign reserves as well as worries the government had turned to unorthodox ways to shore up the currency before March 31 elections.
“Unfortunately, some quarters in the West, using all their media tools, are trying to say our economy has collapsed,” Erdogan told a business forum.
“Let them write what they want, write the headlines they want. The Financial Times writes some things. But the situation in my country is clear.”
The Turkish leader has in the past attacked Western media coverage on the country’s economy. Last month, he blamed currency fluctuations on a Western plot led by the United States to weaken Turkey.
The lira was down almost 1.5 percent against the dollar in Thursday afternoon trading.
The Financial Times story said it had calculated Turkey’s foreign reserves were much lower than the $28.1 billion officially reported in April if the short-term borrowing was stripped out of the calculation.
In a response to the FT, the central bank acknowledged short-term operations may impact reserve figures, though it said its accounting was in compliance with international standards.
But some analysts told the FT they were worried about unorthodox methods and transparency.
The weakening economy was part of the reason Erdogan’s AKP lost Ankara and Istanbul in last month’s local election, in what was a stinging rebuke to the ruling party after more than a decade and a half in power.
After a trade dispute with the US last year, Washington imposed sanctions on Turkey and tariffs on some Turkish goods, leading to a 30 percent slide in the lira’s value.
Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.