Erdogan Says Will Stick to Free Market Despite Economic Siege

Turkey will never make concessions regarding the free market economy, President Recep Tayyip Erdogan has said amid fluctuations in the Turkish lira’s value against the US dollar, describing the latest slip as an “economic siege that has no economic explanation”.

“In this process, we, as a country, had never made concessions regarding the free market economy and we certainly will not. No one should accredit hearsay indicating the opposite,” Erdogan told the 10th Ambassadors Conference in Ankara, Monday, Anadolu Agency reported.

His comments came after the Turkish lira hit historic lows against the US dollar over the last week, losing more than a quarter of its value against foreign currencies in 2018.

“The current level of the currency has no economic explanation,” Erdogan said, describing the situation as an “economic siege”, which “has nothing to do with the crisis of 1994, 2001 or 2007”.

“Turkey is facing a siege in the economy as it does in other fields. The developments in the currency rate have no economic base, on the contrary, it is the common understanding that it is totally an attack on our country,” he said.

He added that the treasury and finance ministry and related institutions “have taken the necessary steps against all these attacks, and will continue to do so. We have plans against all these cases,” he said.

 Fear of New Financial Crisis

Turkey’s plight deepened on Monday as the lira fell to new lows and Erdogan’s refusal to abandon his unorthodox economic policies left investors fearing a new global financial crisis.

Turkey and other countries that borrowed freely when dollars were plentiful and cheap now face soaring debt payments they may no longer be able to make.

Such worries mounted as the plunging lira dragged down currencies in developing countries such as South Africa, Argentina, Mexico and Indonesia.

On Wall Street, trading screens glowed red as stock market losses that started in Asia spread across North America and Europe. But Asian markets were calmer Tuesday after Monday’s declines. Japan’s Nikkei 225 Index is up 1.8% in afternoon trade after falling nearly 2% Monday. South Korea’s KOSPI Index was around 0.3% higher after falling 1.5% on Monday.