Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
Aegon to sell its CEE business to Vienna Insurance for €830mn
The state is back in business
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
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The Turkish lira (TRY) for the first time sank past the 8-per-dollar threshold on October 26 as it continued on its worst losing streak since 1999. The all-time low by the end of the day was 8.0977.
Investors didn’t like last week’s switch back to economic unorthodoxy by the central bank, which declined to raise interest rates, they remain jittery at just how hard-wired into the hugely indebted economy Turkey’s economic imbalances now appear to be and they are disconcerted by Turkish President Recep Tayyip Erdogan picking geopolitical fights on an almost day to day basis. Goading EU leaders and daring the US to hit Ankara with sanctions appear to be the populist strongman’s current favoured pursuits. Another worry is that even though Turkey could soon be mired in its second balance of payments crisis within two years, Erdogan has vowed that the country will not go to the International Monetary Fund (IMF) for assistance.
The day saw the lira, into its tenth week of declines, weaken more than 1% from the pre-weekend close of 7.9650. It has lost 26% of its value this year and has more than halved in value since end-2017. Turkish authorities have spent about $134bn over the past 18 months to support the currency, according to a Goldman Sachs estimate.
“The rising geopolitical tensions with the USA and EU are new sources of pressure weakening the lira. The other main elements are the questioning of monetary policy credibility and the adequacy of the lira yield,” a local bank forex trader told Reuters.
The level of 8 lira to the dollar carries symbolic significance for the Turkish public, the business community and policymakers, analysts say. “It has a psychological effect,” Enver Erkan, an economist at Istanbul-based Tera Investments, was quoted as saying by the Financial Times.
Aykan Erdemir, Turkey Program senior director at the Foundation for Defense of Democracies (FDD), noted that when Erdogan assumed office on March 14, 2003, the exchange rate was 1.64 lira to the dollar.
Albayrak at Citibank
The markets will now take a stronger interest in Turkish Finance Minister Berat Albayrak’s participation in Citibank talks with investors on October 27 and the central bank’s quarterly inflation report on October 28 will also be a big point of interest. Researchers have determined that Turkey’s official inflation reporting leaves much to be desired with inflation in reality thought to be rather higher than the national statistical institute says it is.
The lira on October 26 also hit a record low beyond 9.5 against the euro. Turkey's dollar-denominated government bonds fell by as much as 1.4 cents and the main Istanbul share index, the BIST-100, dropped 1.2%.
Instead of introducing a formal rate hike at its last monetary policy committee meeting, the central bank resorted to more backdoor tightening, raising the cost of funding by adjusting the terms of an emergency lending facility. But such “stealth tightening” is not cutting it with the markets, which want to see unambiguous action to defend the lira.
Erdogan at the weekend struck a defiant tone on the issue of possible sanctions from the US over Turkey’s testing of acquired Russian S-400 missiles, saying in a speech: “You don’t know who you are dancing with. Whatever the sanctions are don’t be late. Do it.”
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