As the lira collapses on the markets, Erdogan renounces the expulsion of ten ambassadors

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Turkey TurkeyYesterday, the Turkish Sultan Recep Tayyip Erdogan had to withdraw his decision to expel ten Western ambassadors to avoid the country’s financial collapse. The Turkish lira hammered yet another negative record after the expulsion ordered by Erdogan of ten Western ambassadors to Turkey. As a result, the national currency devalued by more than 2% in one day, breaking through the barrier of 1 dollar for 9.80 Turkish lira and 1 euro for 11.40 lire. According to analysts, the markets have not forgotten the Turkish president’s threats against them.

A devaluation of over 2% in one day only, in which the Turkish argument broke through the boundary of 1 dollar for 9.80 Turkish liras and 1 euro for 11.40 lire. The national currency had already reached historic lows last week after the Turkish Central Bank proclaimed a new interest rate cut of 200 basis points in a move considered heedless by analysts, taking the reference rate from 18 to 16%.

“It is not our intention to create a diplomatic crisis. However, those who criticize us from now on will be more attentive”, said Erdogan about the ten ambassadors at risk of expulsion for having signed an appeal for the release of the philanthropist Osman Kavala, in prison since 2017 on charges of financing the Gezi Park protests in 2013 and participating in the failed 2016 coup. Erdogan threatened the expulsion of the heads of the diplomatic missions of the United States, Germany, France, Holland, Sweden, Denmark, Finland, Norway, Canada, and New Zealand declared “persona non grata” last Saturday for signing an appeal for a fair trial and Kavala release.

“In the last period, our country has been the subject of attacks and unacceptable observations. Nobody can give orders to our judicial system, and we must respond adequately. The Constitution establishes the judicial system’s independence and what some have said is an insult to our judges, lawyers, and magistrates “, said the Turkish president. This afternoon the news had filtered that Erdogan had welcomed the written declaration. The ambassadors to Turkey specified that the appeal complies with Article 41 of the Vienna Convention on Diplomatic Relations, ensuring no interference in Turkey’s internal affairs. “After the reference made to article 41 of the Vienna Convention, we believe that these diplomats will be more careful”.

The Turkish lira reached the latest negative records with the opening of the markets yesterday. In addition, according to sources quoted by Reuters, a 16% of interest cut on investments by Turkish state banks is expected in line with the Central Bank’s choice to lower its reference rates by 200 basis limits. Among the banks concerned, the Halk Bank, involved in an investigation in the United States for having helped create a scheme to evade US sanctions against Iran.

The umpteenth thud of the Turkish national currency comes not only after the deportation order for ten ambassadors but also a few days after the downgrading of Turkey by the Financial Action Task Force, an intergovernmental organization that deals with combating money laundering and terrorist financing.

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