Turkey targets news, social media accounts reporting on country’s currency crisis

Government says negative stories about lira’s nose-dive amount to ‘economic attacks’

PUBLISHED : Monday, 13 August, 2018, 8:02pm
UPDATED : Monday, 13 August, 2018, 9:43pm

Turkey signalled a clampdown on news and social media, with officials including the public prosecutor warning that criticism may be viewed as “economic attacks” on the country.

Authorities have begun investigating people who “carry out actions threatening security” as well as news reports and social media posts that would “serve as economic attacks”, the state-run Anadolu news agency said on Monday, citing a statement by the Istanbul prosecutor’s office. It tied the news reports to “forces behind the July 15 coup attempt”, referring to a 2016 failed putsch that Turkey blames on a US-based Islamic cleric.

Turkey’s lira has lost about a quarter of its value against the dollar since the US sanctioned two ministers in President Recep Tayyip Erdogan’s government in a row over the continued detention of American pastor Andrew Brunson, pushing the country’s economy into a currency crisis.

The already embattled Turkish lira tumbled some 16 per cent against the dollar on Friday after US President Donald Trump said he had doubled tariffs on steel and aluminium from Turkey.

The Central Bank announced measures on Monday morning to bolster the ailing lira, pumping cash into the market to stop its slide. In its first statement since what was dubbed “Black Friday” in Turkey, it said it was ready to take “all necessary measures” to ensure financial stability, promising to provide banks with “all the liquidity” they need.

Investors need to see serious economic measures ... to prevent things getting completely out of control
Hussein Sayed, market analyst

The Ankara-based capital markets regulator also issued a warning against “misleading news” that affects investor decisions, saying those who are found to be culprits could face fines and prison sentences of up to five years. The banking watchdog published a similar statement over the weekend, warning about false reporting on banks.

The bank also revised reserve requirement ratios for banks, in a move also aimed at staving off any liquidity issues.

But to the dismay of markets, the statement gave no clear promise of rate increases, which is what most economists and analysts say is needed to ease the crisis.

Turkey’s financial crimes investigation board, or Masak, has begun an inquiry into “those who write manipulative stories on the economy”, Haberturk newspaper reported, without saying where it got the information.

The Istanbul prosecutor’s office said it would probe actions that threatened “economic security”.

Erdogan’s spokesman Ibrahim Kalin also warned against “speculative news or actions”, saying that Turkey’s financial institutions were taking “necessary steps to keep financial stability”.

The Interior Ministry has started investigations into 346 social media accounts that “have postings provoking the dollar exchange rate to rise”, Anadolu tweeted, citing an interior ministry statement.

Turkey has previously cracked down on comments, including those by market analysts and brokers, criticising the government and the economy.

Erdogan had on Saturday described interest rates as a “tool of exploitation”, in remarks unlikely to impress the markets.

“Investors need to see serious economic measures and not political ones to prevent things getting completely out of control,” said Hussein Sayed, chief market strategist at FXTM, saying this had to include an emergency rate increase.

Brunson has been held since October 2016 on terror and espionage charges and, if convicted, could face a jail term of 35 years. Trump has described his detention as a “total disgrace” and urged Erdogan to free him immediately.

“President Erdogan of Turkey is showing no sign of backing down against the US,” said market analyst David Madden at CMC Markets UK, adding the crisis risked having a “knock-on effect” around Europe.

Agence France-Presse, Bloomberg