US President Donald Trump has publicly praised Turkey’s President Recep Tayyip Erdogan, despite the ongoing political unrest and financial turbulence following the arrest of Istanbul Mayor Ekrem Imamoglu. His comments have reinforced investor expectations that Turkey will likely face little external pressure over the controversial developments.
During a meeting of ambassadorial nominees on Tuesday, Trump remarked, “Good place, good leader, too,” following an introduction by Tom Barrack, the founder of Colony Capital LLC and Trump’s nominee for US ambassador to Turkey.
Despite widespread protests and an outflow of foreign capital, Turkey’s financial markets have shown signs of stabilisation. The lira traded at 37.9976 per dollar on Wednesday, staying within a tight range below 38 per dollar for six days, following its initial plunge past 40 per dollar after Imamoglu’s detention.
Turkey’s top economic officials, including Treasury and Finance Minister Mehmet Simsek and Central Bank Governor Fatih Karahan, held a call with over 4,500 foreign investors on Tuesday. Simsek reportedly told investors that he would do “whatever it takes” to restore market confidence.
Simsek revealed that 60% of the lira’s recent selloff came from foreign investors, while 30% was from local corporations and only 10% from retail investors. According to Timothy Ash, a senior emerging-markets strategist at RBC Bluebay, the data suggests “little evidence of dollarisation by locals”, which could have significantly worsened the situation.
Bloomberg
