Alpari, a retail trading broker, announced this Friday that its users could no longer open positions in USD/TRY or EUR/TRY trades. The announcement comes amidst growing concerns over a brewing financial crisis in Turkey with the lira having lost 35 percent of its value against the US dollar thus far this year.
In its statement, Alpari noted simply that users on its ecn.mt4, pro.ecn.mt4, and ecn.mt5 accounts would only be able to close positions. The firm cited “economic instability” in Turkey as the reason behind its decision.
Finance Magnates reached out to an Alpari technical representative to get a better understanding of the move. The representative said that “we [Alpari] are not providing any reasons at the moment, only that this is the decision of the company.”
Turkey’s woes stem almost entirely from the country’s president – Recep Tayyip Erdogan. Last night, given another opportunity to assuage the fears of investors at a supporters’ rally in Guneysu, Erdogan only said: “if they have dollars, we have our people, our righteousness and our God.”
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Unless foreign lenders start taking “righteousness” instead of cash, there’s a strong chance that Turks will soon see how empty such statements really are. In fact, Erdogan has taken almost every step possible to ensure Turkey doesn’t succeed economically.
Last month, for example, the Turkish president appointed his son-in-law, Berat Albayrak, as Finance Minister. Albayrak, who was previously accused of selling oil produced by ISIS, spooked investors with his appointment after he replaced the more respected Naci Ağbal.
Erdogan has also been extremely resistant to raising interest rates. The central bank was able to hike rates in May but only after a huge amount of back-and-forth with the president.
Turkey has also been embroiled in a spat with the United States. The imprisonment of an American pastor and Turkey’s refusal to release him has led the USA to level the threat of sanctions against the Middle Eastern nation.