Denialists have been saying for who knows how long that "No, no! This will never happen!" But its is the same denialist blod succers who make money out of this.
Sabri ++++++++++ Turkish central bank props up the lira By Vincent Boland in Ankara Published: June 13 2006 17:18 | Last updated: June 13 2006 17:18 Turkey's central bank was forced to intervene in the foreign exchange markets on Tuesday to prop up the value of the lira as investors continued to sell Turkish stocks and bonds in a wider retreat from emerging markets. The bank lifted its benchmark interest rate by 175 basis points last week in a dramatic move, but it has so far failed to halt a near two-month slide in the lira. Analysts said on Tuesday the bank had spent a modest amount of its estimated $60bn of foreign exchange reserves to keep the lira below TL1.60 to the dollar, after it tumbled to about TL1.64 at one point. The slump in Turkish markets is owing primarily to a global sell-off, which has hit Turkey particularly hard because its stock market and the lira were considered overvalued after a strong surge early in 2006. "It's mainly the global environment, and we are going to have to struggle with this all week," said Sevin Ekinci, an economist at WestLB in Istanbul. Political factors are also playing their part. There is widespread concern among investors about this week's stand-off with the European Union over Cyprus, which is an EU member state but is not recognised by Ankara. The dispute nearly derailed Turkey's EU negotiations, which are already difficult. Abdullah Gul, Turkey's foreign minister, said on Tuesday a "comprehensive settlement" of the divided island's future was required to ensure that a crisis of the kind that erupted this week could be avoided in future. But this was a repeat of a longstanding government position and was unlikely to lead to any new developments. The lira fell by about 2.5 per cent against both the US dollar and the euro, testing the resolve of the bank to spend as much of its reserves as necessary to maintain a stable currency and keep the market liquid. The bank said it had intervened "in order to prevent excessive volatility", but gave no details of the extent of its activity. The intervention was the first in more than two years. Durmus Yilmaz, the bank's governor, had indicated that intervention would occur if the bank felt it was appropriate and necessary to ease volatility in the foreign exchange market. Turkish stocks fell 5.7 per cent and yields on benchmark bonds were hovering just below 19.5 per cent, about 450 basis points above the central bank's benchmark overnight interest rate. Tolga Ediz, an economist at Lehman Brothers in London, said the bank's intervention may not persuade investors to stop selling Turkish assets. "We would not be surprised to see the [central bank] intervene again and again in the coming days if it really wants to keep the currency stable," he said in a note to investors. The bank, which has been hit in recent weeks by a political row over a new governor and by signs that inflation is creeping up again, received an unexpected morale boost on Tuesday from Tim Adams, the US Treasury's senior international affairs official. Speaking in Istanbul, he said the bank had a "proven track record" that would help it steer the Turkish economy through its current rough patch
