Following emergency bank meetings and numerous pleas by Erdogan for Turks not to "pull FX out of their banks," blaming the country's current economic crisis on America, the Lira has opened massively weaker - crashing below 7.00 per dollar for the first time ever...
As The FT reports, Recep Tayyip Erdogan accused other countries on Sunday of mounting an “operation” to bring down the Turkish economy...
“What is the cause of this storm?” he asked a gathering of ruling party officials in the Black Sea city of Trabzon. “There is no economic reason . . . It’s an operation against Turkey.”
But gave no indication he would meet investors’ demands for an emergency plan to prop up the plunging lira.
Reuters reports a low level of 7.22 - all of which implies the Turkish banking system is done.
As Goldman Sachs warned, further lira depreciation to 7.1 would erode all of Turkey's banks' excess capital.
Within the current backdrop, we view banks as being vulnerable to Turkish Lira depreciation given that it impacts:
We calculate that further Lira depreciation to around 7.1 vs. USD on average could largely erode banks’ excess capital
Looks like we were off by 2 days...
After Albayrak ends, there is another speech by Erdogan. TRY should be at 7 by then— zerohedge (@zerohedge) August 10, 2018
Turks have begun symbolically burning (fake) dollars as Erdogan appeals to his fervent religious support to de-dollarize...
Dollar-burning in Turkey pic.twitter.com/6QvTqB8dQN— Hassan Hassan حَسَنْ حَسَنْ (@hxhassan) August 12, 2018
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