Turkish lira plunges as finance minister fails to reassure market on Fed support

Berat Albayrak said the central bank’s foreign exchange reserves were more than adequate. (Reuters)
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Updated 07 May 2020

Turkish lira plunges as finance minister fails to reassure market on Fed support

  • Turkish economy has been hammered by a currency crisis which pushed the lira down to a record low of 7.25 to the dollar on Thursday
  • The shutdown of the tourism industry because of the COVID-19 pandemic has been a further blow to the Turkish economy

LONDON: The Turkish lira tumbled on Thursday despite efforts by the finance minister to defend the country’s fiscal policy.

Berat Albayrak said the central bank’s foreign exchange reserves were more than adequate even as the currency continued to fall during his address.
The son-in-law of President Tayyip Erdogan has been in the spotlight as the economy has been hammered by a currency crisis which pushed the lira down to a record low of 7.25 to the dollar on Thursday.
The president has ruled out seeking help from the International Monetary Fund.
The lira has now lost more than 18 percent against the greenback since the start of 2020 and has been in retreat for six days on the trot.
Earlier Reuters reported that a Fed policymaker — asked on Wednesday about extending swap facilities to Turkey and others in need — said the Fed already has lines with countries that have a relationship of “mutual trust” with the US, and the highest credit standards.
Richmond Fed President Thomas Barkin said the facilities were meant to stabilize markets and not provide funding as such.
Nikolay Markov, senior economist at Pictet Asset Management, told the newswire it was “just a matter of time” before the lira’s weakness and low reserves lead to a crisis in which Turkish firms or banks are unable to meet some debt obligations.
“There is no immediate risk of a full-fledged financial crisis but the risk has increased recently,” he said.
The shutdown of the tourism industry because of the COVID-19 pandemic has been a further blow to the Turkish economy, sapping the country of foreign currency and putting thousands of people out of work as the country nears what would normally be the busy high season.


‘Disappointed’ billionaire brothers urge new talks on Saudi bid for Newcastle FC

Updated 03 August 2020

‘Disappointed’ billionaire brothers urge new talks on Saudi bid for Newcastle FC

  • The Reuben brothers want to buy 10 per cent of the club as part of PIF takeover
  • Brothers remain 'totally supportive' of the deal should there be a way forward

DUBAI: Another big financial backer of the £300 million ($390 million) bid for Newcastle United football club has come out in favor of a takeover led by Saudi Arabia’s Public Investment Fund.

The Reuben brothers, multibillionaire businessmen who want to buy 10 per cent of the club, said on Monday they were “very disappointed” when the bid was withdrawn late last week after months of stalling by the Premier League in England.

“We would welcome any resurrection of talks and progress with the Premier League and are aware that the Reuben brothers remain totally supportive of the deal should there be a way forward,” said a statement from their company, Arena Racing.

The brothers’ renewed support for the deal will raise the pressure on Richard Masters, the Premier League chief executive, who has remained silent since the takeover offer was withdrawn last week.

PIF made no secret of its disappointment and frustration that the Premier League — which has the duty to approve or reject a takeover of a member club  — has reached no decision since contracts were exchanged on the deal in April that would give the Saudi sovereign wealth fund 80 per cent of the 128-year-old club

Amanda Staveley, the British financier who has been at the heart of the deal and would have bought the remaining 10 per cent, also wants to see the deal revived.

The Reuben brothers, who already run two horseracing courses in the northeast of England, said: “We were planning on creating one of the premier sporting hubs in the UK, undertaking development work that is vital for the region and enjoying valuable synergies with the football club.

“We continue to hope that those exciting plans are not in vain.”