Turkey’s currency crash was so bad that Apple seems to have suspended online sales there
Good morning. David Meyer here in Berlin, filling in for Alan.
Thanksgiving looms in the U.S. (which is why this will be the last CEO Daily of the week), so turkeys are on many people’s minds. But this morning I’d like to highlight the country rather than the bird.
In case you missed it, the Turkish lira crashed 15% against the dollar yesterday. Much like the last time it fell so dramatically, back in 2018, the drop was largely down to President Erdogan’s mania for suppressing interest rates, despite the fact that Turkish inflation is running very high—if you think the U.S.’s 6% is bad, try 20%.
Erdogan is so convinced that this is the right path that he has sacked three central bank governors, who sided with pretty much everyone else in disagreeing with him, over the last couple of years. He also defenestrated central bank deputy governor Semih Tümen last month, and yesterday Tümen hit back with this: “We need to abandon this irrational experiment, which has no chance of success, and return to quality policies that will protect the value of the Turkish lira and protect the welfare of the Turkish people.”
In the big picture, the lira’s travails could have an impact on Turkey’s ability to service its debts, and there is a risk of consumers switching their savings into dollars and further pressuring the domestic currency. But there’s also been an immediate effect on the likes of Apple, which appears to have suspended online sales in the country. That’s not surprising, given that it would otherwise be selling its iPhones at a steep discount, compared to pricing in more stable countries. (The company itself has not yet publicly commented on the fact that its Turkish online store won’t let people buy stuff.)
How upside-down is the situation? Check out this quote from an Istanbul Apple Store employee, who told Reuters: “It is pretty surreal with the economy and all, but people see [high-end electronics] as a store of value and flock to stores. They know they’ll be able to sell it a year later for more than what they paid.”
Erdogan shows no sign of backing down, so let’s see if his unorthodox strategy really does fight inflation, as he claims it will. (I wouldn’t bank on it.)
More news below. And do also read Jennifer Alsever’s piece on workplace practices that cause employee burnout: Beware situations that feature lots of micromanagement, people being overworked, and an excess of “side conversations” among workers.
Apple vs spyware
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India may ban private cryptocurrencies with "certain exceptions to promote the underlying technology of cryptocurrency and its uses"—whatever that means. The news around the new cryptocurrency bill, which should appear very soon, whacked coins such as Shiba Inu and Dogecoin. Fortune
Germany's incoming coalition—between the center-left SPD and Greens, and the center-right FDP—will unveil its agreement this afternoon, while also revealing who gets which position in the new government (FDP leader Christian Lindner probably gets the crucial finance post). Last-minute leaks suggest Germany's coal phaseout will be brought forward to 2030 (with certain conditions), gas power will be phased out by 2040, there will be no tax increases, and the minimum wage will be increased to €12 ($13.50) an hour. Reuters
Stéphane Richard, the CEO of French telecoms giant Orange and chairman of the GSMA industry group, has been handed a one-year suspended sentence of complicity in embezzlement of public funds. The case isn't about Orange, but about a 2008 arbitration case that took place when Richard was chief of staff to then-economy minister Christine Lagarde, who is these days president of the European Central Bank. The French government, which is still a minority stakeholder in Orange, has said Richard would have to go if convicted. Politico
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In this inflationary environment, how should investors hedge against rising prices? "Easier said than done," says Ritholz Wealth Management's Ben Carlson in his latest for Fortune. Gold and bonds aren't behaving as expected, and it's not clear how long this inflation will last (some say a year is likely). Fortune
This edition of CEO Daily was edited by David Meyer.
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