Erdogan takes wheel of Turkish wealth fund

Irving Hamilton
September 13, 2018

Mr Erdogan has previously urged Turks to sell their dollars and euros.

The move comes as Turkey's currency has lost nearly a third of its value against the dollar since January.

In a decision published on Thursday in the Official Gazette, the government said any contracts previously made in foreign currency but which are now in effect must be converted into lira within 30 days.

Real estate sales and rental deals in foreign currency are common in Turkey, particularly in the retail sector.

The lira's gains is also proving to be a positive across emerging markets as well with the rand and rouble also gaining on the day, both currencies up by more than 1% against the dollar.

In a speech to a traders' confederation in the capital, Ankara, Mr Erdogan said on Thursday that nobody should carry out business in foreign currency apart from exporters and importers.

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Turkish President Tayyip Erdogan has appointed himself chairman of the country's sovereign wealth fund and completely changed its board, naming Finance Minister Berat Albayrak as his deputy, the country's Official Gazette said on Wednesday.

The bank is expected to raise interest rates on September 13.

The lira has lost more than 40 per cent of its value this year amid a diplomatic spat with the USA and signs of an overheating economy.

At a Tehran summit on Friday with his Iranian and Russian counterparts, an agreement was reached to use local currencies for trade deals, Anadolu reported, citing Iran's central bank governor Abdolnaser Hemati.

It has now increased interest rates by 11.25 percentage points since late April as it struggles to bring the lira out of freefall.

The fall in the value of the lira in recent months has pushed up the price of everyday items in Turkey and raised fears the country is sliding into an economic crisis.

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