(Bloomberg) -- The head of Spain's Banco Bilbao Vizcaya Argentaria SA's Turkey unit urged the central bank to tighten monetary policy to contain the lira's decline.
“Something has to be done about interest rates,” Ali Fuat Erbil, chief executive officer of Turkiye Garanti Bankasi AS, the country's second-largest bank by market value, said in an interview aired by NTV. “Besides fiscal discipline, monetary tightening is the remedy. Is there need for that? Yes there is.”
His call echoes that of business groups and other bank executives following a plunge in the lira on Monday that extended losses against the dollar this year to 42 percent -- more than any other emerging market and major currency. The lira, which pared some of those losses on Tuesday, is being battered by rising tensions with the U.S. over the detention of an American pastor and President Recep Tayyip Erdogan's unorthodox approach to economic policy.
Read more: BBVA Caught in Turkey Crossfire as Crisis Hurts Loan Book
“There will neither be a seizure of foreign-currency deposits, forced conversions to lira nor a limitation on capital moves,” Erbil said. “Those measures can only be taken if we don't want to be a part of the global world and this is not our path.”
To contact the reporter on this story: Asli Kandemir in Istanbul at akandemir@bloomberg.net
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels
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