Kikapu wrote: It's nice by them to try and fool the gullible, but they can't fool the world's markets. Sure, it will help the Lira on the short term to sell off some dollars, but that won't last too long.
Yes, resorting to desperate measures will not fool the markets in the long run. As this article in the WSJ makes clear, Turkey is boxed in a corner:
The only other viable alternative for Turkey's policy makers is to raise interest rates, some investors said. Turkey's war chest is smaller than that of, say, Brazil, so its ability to keep fighting for a stronger lira is limited, they said. Turkey has less than $45 billion in foreign-exchange reserves that commercial banks don't have a claim on, according to analyst estimates. That is about 10% lower than on June 11, when the central bank first began intervening.
But Turkey's central bank has been reluctant to take the step of raising rates for fear of further quashing already-slow economic growth. Like many other central banks, Turkey's central bank steadily cut rates in past months to head off currency appreciation caused by the inflows from investment funds.
"The central bank is trying to make a stand, but people are going to start counting what foreign-exchange reserves they have left," said Angus Halkett, who oversees emerging-market debt at Stone Harbor Investment Partners, which has $68 billion under management. "They will need to hike interest rates in some way. But they are backing themselves into a corner at the moment."
http://online.wsj.com/article/SB1000142 ... 74464.html
