May 25, 2018•Update: May 26, 2018
By Ramazan Ercan
IZMIR, Turkey
Turkey’s prime minister on Friday blamed “manipulations” for the recent foreign exchange rate volatility ahead of Turkey’s June 24 general elections.
“The volatility in foreign exchange rates is the result of some manipulations, especially ahead of the elections,” Binali Yildirim told a rally in the Aegean province of Izmir to tout the ruling Justice and Development (AK) Party's parliamentary candidates.
“Our economy is based on strong foundations,” Yildirim said.
He said Turkey had made it through the 2008 global financial crisis -- the worst since the Great Depression of the 1930s -- relatively unscathed.
In recent months the Turkish lira has been losing ground to the U.S. dollar. The USD/TRY rate has risen nearly 20 percent since the beginning of this year.
Earlier this week, the dollar/lira rate hit an all-time high -- 4.93 -- just before the Central Bank raised interest rates, helping the lira gain ground. Last year, one dollar traded for 3.65 liras on average.
Turkish officials have stressed that the fluctuations do not reflect the true state of Turkey's economy, but are due to manipulations from outside.
On Friday, Deputy Prime Minister Mehmet Simsek said Turkey's Central Bank is capable of taking action against speculative attacks amid the recent forex volatility.
"Its hands are not tied [...] It will do what is necessary," Simsek told private news channel NTV.
This April, Parliament passed a bill for early elections on June 24, cementing Turkey’s move to a presidential system.
In an April 2017 referendum, Turkish voters approved the switch from a parliamentary system to a presidential one.
