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The Turkish currency in descent (archive image)
Photo: MURAD SEZER / REUTERS
Turkish President Recep Tayyip Erdoğan has declared ten ambassadors to be "undesirable persons" in the dispute over the imprisoned Turkish human rights activist Osman Kavala.
The scandal is now also affecting the Turkish currency.
The lira fell to a new record low of 9.74 lira in early Asian trading against the dollar on Sunday evening - after $ 9.595 on Friday evening.
At the weekend, President Recep Tayyip Erdoğan let the conflict with Western countries over human rights activist Osman Kavala escalate and declared the ambassadors from Germany, the USA and France to be "personae non gratae".
As a rule, this classification in international diplomacy is followed by the expulsion of the ambassador.
Whether this step would now be pending remained open at first.
In the past, Erdoğan has repeatedly failed to carry out threats against foreign partners.
Opposition politicians in Turkey said at the weekend that the president only wanted to use the threatening gestures to distract from Turkey's economic problems.
Kavala in prison for four years without conviction
At the beginning of the week, the ambassadors had unanimously called for the release of Kaval and a "fair and speedy settlement" of the cause. Kavala has been detained in Turkey for four years without having been convicted. He was initially arrested on the grounds that he organized and financed the Gezi protests, which were critical of the government, in 2013. However, a court in February 2020 acquitted of this allegation. After he was released from prison after two and a half years, he was arrested again just a few hours later, based on allegations of espionage and a connection with the attempted coup against Erdoğan in 2016.
Insiders have now said that after the unexpectedly sharp cut in interest rates by the Turkish central bank on Thursday, the state banks would also cut borrowing costs sharply on Monday. The three big public lenders Ziraat, Vakif and Halkbank are expected to cut interest rates on corporate, personal, mortgage and other loans by two full percentage points, reports Reuters.
The central bank had surprisingly cut the key interest rate significantly from 18 to 16 percent. Economists had also criticized the move with a view to the inflation rate in Turkey, which recently rose to 19.6 percent. "The central bank's policy of lowering interest rates when inflation is rising and the currency is weakening is likely to exacerbate both problems by further driving capital flight and deterring investment," the analysts at Stratfor had stated. One of the most important questions for investors also revolves around the independence of the central bank. Erdoğan is a declared opponent of interest rates and has already kicked the last three central bank governors out of the door due to differences in monetary policy.In March he dismissed central bank chief Naci Agbal and replaced him with Sahap Kavcioglu - a former MP for Erdoğan's ruling party, the AKP.
tfb / Reuters
