Erdogan Says Those Attempting to Wage `Economic Terror' Will Pay

(Bloomberg) -- Turkish President Recep Tayyip Erdogan said his government will punish anyone attempting to exploit developments in neighboring Syria in order to wage “economic terrorism" on Turkey.

The warning was directed specifically at actors in business and financial markets.

“Those playing an active role in the economy, those within the financial system, if you are attempting to wage economic terror against our country by using developments in Syria as pretext, you’ll be making a mistake,” the president said at an opening ceremony in Ankara on Thursday. “When the time comes, you’ll be held accountable and pay the price.”

Erdogan’s remarks came after the lira weakened to new records against the dollar and euro this week, and the stock market slumped, triggered in part by the threat of U.S. military action against Syria. The lira is the second worst-performing emerging-market currency against peers over the past three months, trailing only the sanctions-afflicted Russian ruble.

“There’s no rational explanation for the increase in exchange rates,” Erdogan said. “They cannot tame us through exchange rates.”

On Thursday, Central Bank Governor Murat Cetinkaya told the bank’s annual general meeting that if needed, additional tightening would be deployed as the bank considers how developments will affect the inflation outlook. The bank also tweaked its forward guidance on what might trigger policy action, leaving economists wondering if that signaled a hawkish shift ahead of an interest rates decision on April 25.

“The central bank will determinedly use all tools in its hands to achieve its goal of price stability,” Cetinkaya said. “If needed, additional tightening can be made by following developments in areas that are affecting inflation.”

--With assistance from Onur Ant and Firat Kozok

To contact the reporters on this story: Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net, Cagan Koc in Istanbul at ckoc2@bloomberg.net.

To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Kevin Costelloe

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