Turkish Bank CEO Demands Action as Lira, Stock Prices Tumble
(Bloomberg) -- The head of Turkey’s biggest listed bank by assets, whose stock is on track to plunge the most in 15 years, says the nation needs to act quickly to stem the lira’s collapse.
“On interest rates, whatever the science of economics requires needs to be done,” Adnan Bali, who runs Turkiye Is Bankasi AS, more commonly known as Isbank, said in a BloombergHT television interview Monday. “Now it is time for action, not for words. The market is punishing the state for a lack of sufficient action.”
“We may not like it -- you have to get chemotherapy to get rid of unwanted tissues, risking the immune system of the body,” Bali said. “Interest rates are like this.”
The lira kept tumbling Monday, sliding another 7 percent against the dollar after crashing more than 20 percent last week as President Recep Tayyip Erdogan continues to defy financial-market orthodoxy. The currency has lost about a quarter of its value against the dollar since the U.S. sanctioned two ministers in Erdogan’s government in a spat over the continued detention of an American pastor.
Bali praised the nation’s central bank, which earlier this morning lowered the amount commercial lenders must park with the regulator and eased rules that govern how they manage their lira and foreign-currency liquidity. The central bank promised to “take all necessary measures,” to maintain financial stability and said all options were on the table, but didn’t specifically mention higher interest rates.
The nation’s banks have about $50 billion of foreign-exchange liquidity in the system, Bali said, calling the current crisis “a clear and serious speculative attack” that’s unrelated to Turkey’s economic fundamentals. Bali said his own bank has no need to raise capital.
Isbank’s shares plunged as much as 13 percent Monday after an 8 percent drop Friday, touching a six-year low and dropping the most in Turkey’s benchmark index. They’re on pace to post their biggest daily decline since 2003. Among other lenders, Yapi ve Kredi Bankasi AS, Akbank Turk AS and Turkiye Garanti Bankasi AS all dropped more than 10 percent.
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