Turkish supervisory authority files criminal charges for relocating the lira

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Turkey’s Banking Authority has filed criminal charges against more than 20 people, including former central bank governors, journalists and an economist, for alleged attempts to manipulate the country’s exchange rate that could deter criticism of the government’s unorthodox economic policies.

The regulatory and supervisory authority for banks announced on Monday on Twitter that it is taking legal action against 26 people and Twitter accounts for “their contributions to social media and” [through] media outlets ”, in the midst of a currency crisis that has reduced 35 percent of the value of the lira this year.

Among the defendants is Durmus Yilmaz, who ran the central bank from 2006 to 2011 and is now an oppositional lawmaker. Another former central bank governor, Rusdu Saracoglu, is also on the banking regulator’s list.

The regulator said their complaint was based on an article in the banking law prohibiting the media from making statements that could discredit or damage a bank’s reputation.

The Turkish government often uses the courts to silence its critics and has initiated criminal proceedings against journalists and social media users for their remarks during previous financial market volatility.

President Recep Tayyip Erdogan has argued that a weaker lira will boost exports and economic growth, and has ordered the central bank to cut interest rates despite official inflation rates of over 20 percent. He argues that contrary to popular economic theory, high interest rates fuel inflation.

Erdogan was forced to take emergency action on December 20 when the lira fell to a record low of 18.4 per dollar, a 60 percent decline over the year. The rescue plan, which includes government guarantees to compensate savers against the currency’s devaluation, has helped the lira rebound to 11.5 against the dollar.

A sharp decline in the central bank’s foreign exchange reserves early last week suggested that government institutions had bought billions of liras to prop up the currency. Turkey’s net foreign assets fell by $ 5.9 billion in the first two days of last week, according to calculations by the Financial Times based on central bank data.

Finance Minister Nureddin Nebati said in a television interview on Monday that there were no such interventions on December 20 and that the lira made up most of its losses after the Turks, following Erdogan’s promise to protect the lira deposits, “made their own Dollars sold ”. .

Guldem Atabay, an economist who writes for the Para Analiz website and was nominated by the central bank, said she had not yet been officially notified of the complaint but suspected the move was related to concerns she had about potential risks with the had voiced new deposit instrument.

“The lawsuit serves as a threat to the other economists who are also drawing attention to the government’s political mistakes,” she said. “I’ll keep trying to let people know what I’m seeing that is math and science-based.”


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