Economy Minister to defend currency with “lawsuits”

Turkey’s currency crisis turned increasingly political on Thursday after a top minister urged citizens to sue economists who comment on social media about the lira’s slide.  Turkey’s banking regulator BRSA, is notorious for suing economists over comments about currency or banks.  A leading left-wing Turkish economist, Mr Mustafa Sonmez field a complaint about BRSA for wrongful lawsuits and defamation of character. Another economist, Atilla Yesilada, called BRSA “the Spanish Inquisition”.


Finance Minister Nureddin Nebati’s unusual remarks late Wednesday followed the banking regulator’s decision to file complaints against more than 20 people — including a former central bank governor — over their Twitter posts.


Turkey’s beleaguered currency entered a tailspin that saw it lose nearly half its value from the start of November to the moment President Recep Tayyip Erdogan announced new currency support measures last week.


The criminal complaint targeted journalists and economists who said the lira’s falls would continue until Erdogan radically reversed his policy course.


Nebati accused the commentators of using “psychological warfare” by urging Turks to buy gold and dollars in order to preserve their savings against further lira declines.


“File a lawsuit against anyone who misleads you,” Nebati urged citizens in a wide-ranging interview on CNN Turk.


“Let the small investor who makes a loss sue the one who misled them.”


Nebati has already lied about the sudden appreciation of TL immediately after Erdogan’s unveiling of yet another new economic plan, by claiming Central Bank did not sell FX to nudge TL higher. Central Bank balance sheets clearly demonstrates that it has swapped $8.6 bn to state banks for “back-door” exchange rate intervention .


 ‘Violation of privacy’


The Turks named in the criminal complaint include former central bank chief Durmus Yilmaz — now a parliament member from the nationalist opposition Iyi Parti (Good Party) — and economist Guldem Atabay.


Emerging markets economist Timothy Ash of BlueBay Asset Management called Yilmaz “the best governor during my stint in covering Turkey”.


Yilmaz headed the policy-setting bank when Turkey was still a foreign investors’ darling between 2006 and 2011.


“Guldem Atabay is just an excellent economist trying to do her best covering Turkey,” Ash added.


The controversy comes with Erdogan’s government preparing to unveil new legislation ahead of an election due within the next 18 months aimed at further tightening government controls over social media.


Turkey has used the threat of heavy penalties to force Twitter and other platforms to appoint local representatives who can quickly follow through on court orders to take down contentious posts.


WATCH:  Has Erdogan Averted a Currency Crisis? | Real Turkey


Yilmaz continued his attacks on Erdogan’s team on Thursday by poking fun at the finance minister’s suggestion that the US Federal Reserve was owned “by five families” and lacked real independence.


“I swear, we are so tired of this,” Yilmaz wrote.


Economist and journalist Mustafa Sonmez lodged his own complaint against Istanbul’s chief public prosecutor and the banking regulator on Thursday for publicly naming him in its press release.


“Their crime: violation of the privacy of private life, damage to reputation and targeting,” Sonmez said on Twitter.


New losses


Economy Minister Nebati  claims TL59 bn worth of FX deposits had been converted to TL in the first week of the FX protected deposit program, a claim yet to be verified by actual data.



Erdogan’s new currency support measures are designed to make Turks feel safer about holding liras in the bank.


They effectively tie the value of special new deposits to the dollar by promising to compensate excessive losses incurred from swings in the exchange rate.


The central bank said late Wednesday it would also extend this “incentive” program to people who hold their savings in gold.


Much of the focus in Turkey is now centered on how ordinary citizens respond to the policy moves.


Top officials have been incensed by media reports and claims from opposition leaders that the government has spent huge sums in the past few weeks indirectly supporting the exchange rate.


Erdogan’s team argues that the lira’s gains last week were prompted by trust in the new banking schemes and not the alleged currency interventions.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.