Turkey election: Turkish lira hits RECORD LOW as Erdogan plots economy crackdown | City & Business | Finance

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Turkey’s lira slid to a record low following Mr Erdogan’s comments on his visit to London that reinforced long-standing fears about the president’s drive to shape monetary policy and stem the country’s rapidly rising cost of living.

Mr Erdogan said Turkey’s central bank is independent but added the bank would not be able to ignore signals from the head of the executive once the switch to a presidential system is complete following the June vote.

He told Bloomberg TV: “I will take the responsibility as the indisputable head of the executive in respect of the steps to be taken and decisions on these issues.”

Following the interview, the lira sunk to a fresh record low of 4.43 against the dollar, bringing its losses this year to 14 percent.

Turkey’s unpredictable shifts are a cause of concern for the UK that hopes for an immediate post-Brexit trade deal with the rapidly emerging economy.

Turkey is now the 13th largest economy in the world, and boasts growth at twice the rate of the EU. Based on a gravity trade model Turkey is the UK’s geographically closest big non-EU market.

With Brexit in mind, the UK has focused on improving relations and last year it doubled its export finance programme to Turkey to £3.5bn.

Fadi Hakura, manager of the Turkey Project at Chatham House told the Financial Times despite Turkey being a part of the EU’s customs union, “Brexit Britain is desperately seeking to boost trade and investment with Turkey to compensate for the expected loss of trade within the UK-EU once barriers rise between them.”

Marcus Chenevix, analyst at TS Lombard said the UK sees Turkey “as a fast-growing market for exactly the kind of exports that British governments are always trying to encourage, namely cars, machinery and pharmaceuticals, all of which generate jobs in areas where elections are won.”

With Mr Erdogan in London to meet British Prime Minister Theresa May the UK is working hard to foster good ties with Turkey before Brexit.

Mrs May secured a commitment last year that Britain and Turkey would work on post-Brexit trade, and Mr Erdogan said he was keen on securing a deal immediately after Britain leaves the EU.

However, ties between the EU and Turkey are increasingly strained, with Brussels saying that Preident Erdogan is leading his country away from the path to membership, while some Turkish officials say they feel betrayed by some the bloc’s leaders.

Mrs May is also under pressure from human rights campaigners who clain that Mrs May is turning a blind eye to abuses, in Turkey’s case to the jailing tens of thousands of people after a failed coup in July.

The Prime Minister’s spokesman said Britain would raise human rights with Mr Erdogan at the meeting.



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