Turkish state-owned Halkbank sold dollars on the cheap on Friday night in what the bank said was a failure of third-party foreign exchange software, according to a report by online news outlet Ahval.
The bank, run by Turkey’s sovereign wealth fund, offered dollars at 3,88 Turkish lira in late night trade on Friday before its website went offline. The US dollar had closed the week at 6,58 Turkish liras.
Halkbank said in a statement that the trading at these erroneous levels had been limited in scope and occurred for a short period. “Prices had now been corrected,” it added.
The event prompted heated discussions on social media. Some Twitter users accused the Turkish government led by President Recep Tayyip Erdoğan of organizing the trades to covertly help indebted companies facing heavy repayments of foreign currency loans in September. Others said the bank had failed to prevent an apparent cyber-attack, pointing the finger at hacker groups.
The Cumhuriyet newspaper called on the bank to fully disclose the trades and who had made them.
Halkbank is a focus of controversy in Turkey after Mehmet Hakan Atilla, a deputy CEO of the bank was arrested and tried in the United States for his alleged involvement in a scheme to evade US sanctions on Iran. Atilla is now in Manhattan jail awaiting an appeal hearing while Halkbank is the subject of a US Treasury investigation that could result in hefty fines.
Social media users also pointed to erroneous dollar buying and selling prices set by ING late on Friday that lent credence to a cyber attack taking place. ING, which hasn’t made a statement explaining the price discrepancies, was offering dollars at 4,88 Turkish liras at one point, clips published on Twitter showed.
Turkish government starts punishing firms for price increases
Meanwhile, Turkey’s trade ministry started punishing some firms for unjust price increases. The measures came after inspectors tightened controls across Turkey on Friday, pro-government NTV television reported on Saturday. In Ankara, the inspectors walked into retailers selling furniture, white goods, and food, the news channel said and added that proceedings have been started against some companies.
The move comes after the ministry published a decision in the government’s Official Gazette saying firms would be charged with “commercial deception” should they be found to be hiking prices without good reason. Ministry officials are studying whether businesses are raising the price of goods that are unaffected by a recent collapse in the Turkish lira’s value.
A board within the ministry has been given responsibility for swiftly determining such behavior and taking action, according to the decision.
Inflation in Turkey is surging after the lira dived against major currencies. Losses against the dollar so far this year total about 50 percent. Consumer price inflation was 15,9 percent in July and is expected to accelerate further in August, led by food costs. Data for last month is due on Sept. 3.
The Turkish government has also warned businesses against hoarding goods, a practice common in the 1990’s when inflation had briefly exceeded 100 percent. Meanwhile, the central bank is now refraining from interest rate hikes that economists say would pare inflation. It had raised its benchmark rate by 500 basis points to 17.75 percent in the first half of the year. It hasn’t increased it again since early June despite the lira diving to fresh record lows.
