Turkish Lira Tumbles On Soaring Unemployment, "Absolute Shitshow" Investor Meeting
Erdogan’s refusal to concede defeat in Turkey’s commercial hub has been condemned by political opponents as an attack on Turkey’s democratic foundations. Among the vocal critics of the AKP’s reaction to losses at the ballot box was Mustafa Sonmez, an economist known for opposing the government’s policies.
Sonmez was detained on Sunday and later released after being questioned largely over his tweets over his tweets following the vote, according to his lawyer, Husniye Aydin. In his latest posts on Twitter, Sonmez criticized authorities for not recognizing the opposition’s candidate as the winner of Istanbul’s mayoral race.
Making matters worse for Lira bulls, there is little hope for any near-term turnaround: “The rise in unemployment will continue - albeit at a slowing pace,” said Muammer Komurcuoglu, an Istanbul-based economist at IS Investment. “A sharp monthly deterioration in job creation continues to take place across all the sub-sectors. We are seeing very clearly the impact of the economic slowdown on unemployment.”
But beside the collapsing Turkish economy, which was to be largely expected following last summer's financial crisis, what has mostly spooked investors is that even as Turkey rolled out a recapitalization plan for state banks, the program unveiled by Treasury & Finance Minister Berat Albayrak last week has underwhelmed investors.
In fact, as Axios reports, Turkish Finance Minister Berat Albayrak - Erdogan's son-in-law who replaced 2 highly respected ministers, despite having virtually no qualifications - held a closed-door meeting with hundreds of investors during the IMF-World Bank meetings in Washington last week, "and some who attended called it the worst they've ever had with a high-ranking government official."
"It was an absolute shit show," one emerging market fund manager who attended the meeting told Axios. "I've literally never seen someone from an administration that unprepared," another investor said.
And, as Axios correctly notes, the disastrous meetings "could not have come at a worse time for Turkey. Investors are growing more anxious as the country heads toward recession and President Recep Tayyip Erdogan is seeing his popularity erode."
Incidentally, what this means is that starting tomorrow, Axios will most likely be banned in Turkey.