Turkish President Recep Tayyip Erdoğan may have been successful fighting his domestic foes, but a battle with financial markets is one he is set to lose.
Erdoğan is playing a dangerous game by testing his unorthodox economic theories and challenging investors, who are in disbelief, just when the country is going to elections and instability is rife across the nation’s borders in Syria and Iran.
“You can fight your domestic foes all you want, but when you are trying to take on a financial market, that is a battle you can’t really win,” said one fund manager, whose firm attended a closed-door investor meeting with Deputy Prime Minister Mehmet Şimşek, according to Reuters.
Erdoğan loves picking fights, though he would be well-advised not to do so when it comes to global markets, another investor said, according to the news wire.
“He picks battles with everybody … he is fighting the opposition, he is fighting (Islamic preacher Fethullah) Gulen, he is fighting the extremists, he is fighting after the failed coup – now he is fighting the markets, and that is dangerous,” said a fund manager at a major asset management firm.
Erdoğan said late on Monday that he planned to lower interest rates following snap presidential and parliamentary elections on June 24, shocking investors who were expecting the central bank to increase rates to stem a slide in the lira to historic lows. On Wednesday, he called a meeting of the central bank and ministers after the lira slid to a record 4.5 per dollar.