'Manipulation' behind sharp volatility in Turkish lira

By Seval Ocak Adiyaman

ANKARA (AA) - The recent fall of the Turkish lira is likely a product of "manipulation", according to the Turkish customs and trade minister on Thursday.

"There are strong signs that foreign exchange rates are being manipulated," Bulent Tufenkci told the Anadolu Agency’s Editors’ Desk in Ankara. "There are especially sharp outflows of some funds operating inside and outside of Turkey.

"Both the government and the central bank are closely monitoring the moves."

The exchange rate hit a historical record of more than 3.90 lira to the U.S. dollar on Wednesday afternoon.

The lira has depreciated by more than 11 percent against the dollar since Jan. 1, raising suspicion of manipulation, particularly as the rate moved in the early morning and late evening when market liquidity is shallow.

Economy experts said the fluctuations in the dollar/lira rate seemed overly manipulative and did not reflect the genuine fundamentals of Turkey’s economy.

Cemil Ertem, a top adviser to President Recep Tayyip Erdogan, said Wednesday that the recent demand for the U.S.dollar against the Turkish lira had come amid shallow market conditions and appeared to be an overly speculative move.

After rising to a record high of 3.9412 on Wednesday, the rate retreated to 3.8050 at 11.30 a.m. (0830GMT) on Thursday.