Turkije – lira zakt door bodem van de beurs
Turkije is economisch verder in de problemen geraakt, nadat president Erdogan de Turkse munt zelf nadrukkelijk de put in speechte.
Dat gebeurde in eerste aanleg dinsdag al:
The Turkish lira cemented its status as the worst performing major of the year, plummeting to new record lows on Wednesday a day before the central bank is expected to slash rates further despite soaring inflation after Turkish President Tayyip Erdogan said he will continue his battle against interest rates “to the end.”
In comments that chopped the currency’s value by as much as 3%, pushing the USDTRY to a fresh record of 10.6364, Erdogan said he would lift the interest rate burden from people – i.e., he would force the “independent” central bank to keep cutting rates or else he will just fire the country’s top banker again and replace him with an even more docile puppet – and urged businesses to invest, hire and raise exports.
Waarop de lira een duikvlucht van 3% waardevermindering nam:
Niet voor het eerst, maar desondanks indrukwekkend:
Foreign investors, having given Turkey the benefit of the doubt for much of the past decade, are finally fleeing the country, saying that Erdogan – who has long described himself as an enemy of interest rates – has swayed monetary policy too far with his frequent calls for stimulus and his rapid overhaul of the central bank’s leadership.
A day before a central bank policy meeting, at which it is expected to cut rates by another 100bps, the president repeated his unorthodox view that higher rates were the cause of inflation and questioned why some of our “friends” defended tight policy.
President Erdogan’s opinie over hoe rente behoort te functioneren joeg de laatste investeerders in Turkse valuta het land uit. Ervaringen in het verleden waren ook ditmaal een prima richtsnoer van wat er te verwachten viel:
Erdogan’s latest outburst is hardly new: in the past he has aggressively commented on monetary policy ahead of central bank meetings, often moving markets. The lira has lost 64% of its value since the end of 2017 in part due to tattered central bank credibility. As he left parliament in Ankara, Erdogan said the central bank would decide on rates “independently” when its monetary policy committee meets at 1100 GMT on Thursday.
Op de internationale markten geloven sommigen dit echter niet, tot ze er met de neus in terecht komen:
In Touch Capital Markets senior FX analyst Piotr Matys said cutting rates on Thursday would be too risky with the lira under pressure, and he predicted no policy change, although he will most likely be wrong.
“In order to stabilize the lira, the bank would have to reverse those 300-basis-point cuts since September but I think that the bar for it to make a U-turn is still set fairly high,” he said, operating under the assumption that Erdogan cares about lira stability when clearly that is no longer the case.
“Tomorrow’s meeting could prove the most important for (Central Bank Governor Sahap) Kavcioglu. Allowing the lira to fall at such a rapid pace will cause serious damage to the Turkish economy,” Matys added. Ironically, that may be just what Erdogan wants.
The lira’s depreciation stokes prices via Turkey’s heavy imports, and also raises default risks for companies with foreign currency debt. The depreciation combined with inflation has meanwhile eaten into Turks’ earnings.
Erdogan, who appointed Kavcioglu in March, also pulled his best Federal Reserve impression and questioned why business people did not take out loans and invest in risk assets as rates were lowered in the last few months.
Hetgeen vandaag dan ook zonder mankeren gebeurde:
Tot groot amusement van diegenen die het al zagen aankomen:
As was expected, moments ago the Turkish central bank cut its key interest rate for a third month but said it would consider ending the easing cycle from December amid a weakening currency and worsening inflation outlook. The lira crashed to a fresh all time low after staging a feeble rally overnight ahead of the rate cut.
Terrified of being fired by Erdogan, the Monetary Policy Committee heeded the president’s renewed push for lower borrowing costs, and cut its one-week repo rate by 100 basis points to 15%, in line with the median estimate in a Bloomberg poll of 24 economists and the central bank’s own monthly survey.
Met een inflatie van 19,9% was investeren in de Turkse lira al geen verstandige zet, maar nu de bankrente in het land naar 15% is gedrukt, is het kopen van lires een garantie voor financiële malheur. Deskundig commentaar gaat er nog steeds van uit dat bij de financiële leiding van Turkije het verstand ooit wel weer eens zal indalen:
..even the lunatics that run the Turkish monetary asylum have to realize that -5% real rate will be devastating and as such, the bank hinted at an end to the rate cuts: “The Committee expects that the transitory effects of supply-side factors and other factors beyond monetary policy’s control on price increases will persist through the first half of 2022,” it said in a statement. The central bank would therefore consider ending the cuts next month, it said.
Maar anders dan dat het verstandig is draagt niemand iets aan als argument. Voorlopig zijn tirades van president Erdogan, waarbij de rente door hem wordt genoemd, derhalve een veilige situatie om short te gaan in Turkse lira´s. Anderzijds! Hyperinflatie jaagt de prijzen van aandelen op de Turkse beurs sterk op:
…like hyperinflation but that’s good for stocks, and as a reminder, it was none other than Erdogan who yesterday was confused why people are complaining about the crashing lira when they can just invest in stocks.