Turkish Deputy PM Şimşek: Rumors of Halkbank fine limit central bank’s effect on TL

Turkish Deputy Prime Minister Mehmet Şimşek has claimed that a decision made by the Turkish Central Bank to increase interest rates only had a limited effect on a loss in value of the Turkish lira because of a rumor circulating that the US has decided to fine the state-owned Halkbank.

“The news implying that Halkbank will receive a fine of some $49 billion is false,” Şimşek said on an NTV broadcast on Friday.

“The central bank’s hands are not tied against speculative attacks. It will do what is necessary. Let me highlight this: It has the full support of our government,” Şimşek added.

Halkbank released a statement on Thursday denying rumors circulating on social media that US authorities have fined the bank due to a case that involved the violation of sanctions on Iran.

Mehmet Hakan Atilla, a former executive of Halkbank, was sentenced by a US judge on May 16 to 32 months prison after his conviction of conspiring to violate US sanctions on Iran.

“Of course, right now a great injustice is being done to Halkbank. In particular, HakaAtilla is in no way a criminal,” President Recep Tayyip Erdoğan told Bloomberg TV on May 14, just before the Atilla sentencing decision was announced.

The Turkish lira’s slump to a record low of 4,92 to the dollar on Wednesday was part of a plot against Turkey by mysterious foreign forces, the country’s top diplomat Mevlüt Çavuşoğlu said during a speech to local businessmen on Friday.

The “economic attack” was launched by unnamed forces who “who want to bring Turkey and [President] Recep Tayyip Erdoğan to their knees,” the Turkish foreign minister told a meeting of businessmen in Turkey’s southern province of Antalya, adding that these forces want to force Turkey to take loans from the International Monetary Fund.

“These are games, and we will break them,” said Çavuşoğlu, using a Turkish expression popularly used to refer to conspiracies. The “games” would continue until elections are held on June 24, but Turkey’s economy was too strong to be harmed, he said.

Çavuşoğlu’s words echo prior statements by top Justice and Development Party (AKP) figures including Erdoğan, who also blames the weakening lira on unidentified foreign powers. Financial analysts, however, have linked the lira’s poor performance to the president’s reluctance to raise interest rates to combat the currency’s slide.

Meanwhile, the İstanbul Public Prosecutor’s Office today announced the launch of an investigation into social media accounts claiming the United States had decided on the amount to fine the Turkish state-owned Halkbank for its involvement in breaking sanctions on Iran, the left-wing Birgün newspaper reported on Friday.

The prosecutor’s office insisted that no such decision had been made and said that social media users claiming otherwise intended to harm Halkbank, “an important Turkish institution.”

US authorities are set to punish the state-run Halkbank for violating sanctions on Iran after the bank’s former deputy general manager, Mehmet Hakan Atilla, was sentenced to 32 months in prison by a US federal court on May 17.

Atilla was found guilting of setting up mechanisms through Halkbank that allowed Iran to move its money internationally by trading gold and imaginary food exports.

Some Twitter and Facebook users this week shared posts saying that US authorities had decided on the amount of the penalty, much more than the $9 billion that some have been predicting. Some speculate such a fine would potentially be enough to spark a financial crisis.

The posts also claim that the ruling AKP has sent a delegation to the United States asking for the announcement of the verdict to be delayed until after the elections on June 24.

The prosecutor’s office said today that those posts harmed the credibility and reputation of Halkbank and violated Article 107 of Turkish capital markets law regulating fraud. (SCF with turkishminute.com)

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