Tuesday 14, August 2018 by Kudakwashe

Kuwait denies injecting $1.6 billion to aid Turkish lira

 

Nayef Al-Hajraf, Kuwait’s Minister of Finance met with Berat Albayrak, Turkish Minister of Treasury and Finance on Sunday, but the duo did not discuss any possible backing to the Turkish national currency.

  

Kuwait has denied reports that it injected KWD 500 million ($1.6 billion) to back the Turkish lira, which has been in free-fall over deteriorating ties with the US, reporting local daily, Arab Times.

In a statement, Kuwait’s finance ministry said that during the meeting both ministers addressed the latest economic situation in Turkey, where Kuwait has various investments.

The Turkish central bank has over the last few weeks defied calls from markets for rate hikes to combat these problems, raising fears of interference from the president who has repeatedly called for low interest rates. 

Turkey’s situation is the most precarious among emerging markets because so much of its growth was driven by debt in foreign currencies. That makes the currency drop so much more painful as it will increase the cost of servicing debt for Turkish companies and banks and could lead to bankruptcies.

  

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