Recep Tayyip Erdogan Hits Turkey Currency Storm Month Before Polls

Turkish President Recep Tayyip Erdogan is facing a potentially severe crisis just a month ahead of elections over the sharp depreciation of the lira which risks buffeting his campaign and even influencing voters

Ankara, (APP - UrduPoint / Pakistan Point News - 23rd May, 2018 ) :Turkish President Recep Tayyip Erdogan is facing a potentially severe crisis just a month ahead of elections over the sharp depreciation of the lira which risks buffeting his campaign and even influencing voters.

Erdogan has always painted himself as a champion of the Turkish economy, pointing to how growth and investment have expanded under his rule after the misery of Turkey's 2000-2001 financial crisis.

But the lira's depreciation by nearly 19 percent against the US Dollar since the snap polls were called on April 18 may signal the economy could be a burden, rather than a boost, for Erdogan. The Turkish strongman, a doughty campaigner and so far undefeated at the ballot box in any poll, has been strangely reticent in this campaign although his team emphasises his rallies will get fully under way on Saturday.

And when he speaks to the crowds in town squares nationwide, Erdogan will have to now confront people's fears that the external value of the money in their pocket is crumbling.

"For Turks, a weak Currency translates into a weak economy, so it's difficult to see how this will not hurt Erdogan and the AKP (ruling party) even though their voter base is fairly loyal," said Atilla Yesilada, country advisor at Global Source Partners in Istanbul, said.

Although the country was the fastest growing in the G20 in 2017, recording 7.4 percent growth, concerns remain over the economy overheating, the widening current account deficit and double-digit inflation.

Inflation is currently at 10.85 percent. On Wednesday, the lira for the first time ever tested the 5.0 ceiling by hitting 4.92 lira to the dollar before later dropping to 4.86, losing over 4.0 percent of its value.

Erdogan himself has spooked the markets by saying he plans a greater say in monetary policy -- despite the nominal independence of the central bank -- after the polls. Analysts at Commerzbank said in a note that Turkey was going through a "currency crisis".