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The newly-appointed UK PM Boris Johnson won first prize in a UK magazine competition three years ago. It asked readers to compose filthy limericks about Recep Tayyip Erdogan. Johnson came up with:
“There was a young fellow from Ankara,
Who was a terrific wankerer.
Till he sowed his wild oats,
With the help of a goat,
But he didn’t even stop to thankera.”
Johnson later said the Turkish leader had not brought up the verse when they met.
2.2 INSIGHT: Are these markets for real?
Turkish assets have of late been gaining—or at least not collapsing— even though President Recep Tayyip Erdogan has been deploying his by now well-worn strategy of sparking consecutive headline-grabbing shocks to ensure that everyone forgets his political defeats, the latest being his humiliating loss in the Istanbul revote at the end of June.
The main driver behind the solidity displayed by Turkish assets is seen as the full control exercised by the authoritarian government over the markets.
The Turkish lira (TRY) remains under the control of officials via the state banks that are monitoring the FX market on a 24/7 basis—they curb any sign of an upside move and exert pressure on the exchange rate when there is any downside potential. The Treasury’s latest eurobond sale, for $2.25bn, fuelled the government’s arsenal in the lira battle, while the central bank taps local lenders’ FX deposits at any time it sees fit.
The currency regime in Turkey is currently defined as a ‘dirty float’.
The Borsa Istanbul is also seemingly much under the control of the so- called ‘The Dude’, a mysterious algorithmic trader who has worked in favour of Erdogan since the beginning of 2016.
The domestic bond markets have also been systematically scrapped since last November after the government spooked foreign investors by manipulating interest rates at debt auctions. Moreover, the banks’ deposit and loan rates are essentially imposed.
From the domestic perspective, it is not really possible to define Turkey as a free and open market anymore, but there again Donald Trump’s is doing pretty well undermining such concepts with his heavy, public pressure on the Fed and nickname of ‘Tariff Man’.
7 TURKEY Country Report August 2019 www.intellinews.com