Erdogan went on the attack again against the financial industry after the lira's crash.
- Turkey launched probes into JPMorgan after claiming that the bank's research note suggesting investors short the country's currency was "misleading and manipulative."
- It's not the first time the country has hit out at foreign investors over alleged currency issues with Turkey's President, Tayyip Erdogan, warning they would pay a "heavy price."
- Turkey's lira plunged more than 4% last Friday, continuing the country's economic difficulties of late.
It's a sign of worry at the top of the Turkish government when a banking research note causes two separate probes into a financial institution.
That's exactly what happened over the weekend with both the Capital Markets Board of Turkey (SPK) and the Bank of Turkey watchdog, the Banking and Regulation Supervision Agency, almost simultaneously launching probes into JPMorgan after one of its currency strategy reports suggested shorting the lira.
The Turkish lira tumbled more than 4% against the dollar Friday, its biggest one-day fall since a currency crisis took hold in August. After the August crash, President Recep Tayyip Erdogan railed against so-called "economic terrorists."
At a rally on Sunday, Erdogan went on the attack again.
"If you get involved in provocative acts, saying 'foreign currencies will strengthen, this will happen, that will happen,' you will pay a very heavy price . . . The BRSA has taken some steps. I will make you pay a very heavy price," he said, according to the Financial Times.
JPMorgan declined to comment.
"We have received complaints that some banks led clients to buy foreign currencies in a manipulative and misleading way. Our agency has launched an investigation and a probe and the necessary administrative and judicial processes will be conducted," the Banking Regulation and Supervision Agency said in a statement on March 23, per Hurriyet.
Hysteria from Turkey's leader over the lira's value is nothing new. Banks regularly write market commentary on individual countries and their currencies, making calls of manipulation a large leap. A copy of the JPMorgan report, cited by Reuters, said it saw a high risk that the lira would decline after Turkish local elections which are set to take place on March 31, and recommended that clients go "long" on the dollar.
Turks have been selling lira for dollars ahead of the election which is leading the country's central bank to boost its reserves, according to Ahval. The central bank's net reserves slid $6.3 billion in the two weeks to March 15 to $28.5 billion.
Currency issues have had a major impact on the Turkish economy and Turkish companies. Many large Turkish companies have US dollar loans which become increasingly difficult to repay as the lira slides in value and has even caused difficulties for the owners of viral sensation "Salt Bae's" restaurants.