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The Turkish lira has suffered a major setback after President Recep Tayyip Erdogan praised the recent interest rate and announced that his country was struggling with an “independent economic war”.
The stock, which fell sharply by 40 percent against the dollar this year, fell 15 percent on Tuesday – a decline that even surpassed Turkey’s 2018 financial crisis – and crossed the symbolic limit of 13 to a dollar later. Erdogan used contradictory words to express his vision for the country’s economy. Fall fell about 11 percent in broad daylight in London.
“It’s like a horror movie,” said Enver Erkan, a Terra Investment expert from Istanbul, adding that it was difficult to predict how much the price would drop as policymakers seemed to be willing to fall.
“This is the inevitable consequence of Erdogan’s war on prices,” said Uday Patnaik, head of market debt arising from Legal & General Investment Management. “The only thing that can stop the free fall is the sign of a major independent bank in Turkey. But there is not much hope for that. Erdogan is a kind of double-minded man.”
Erdogan, an anti-interest activist, announced Monday night that he was “delighted” with the central bank. cutting down trees for the third consecutive month last week, despite warnings from economists to raise inflation, which is already moving at a 20 percent rate, is also detrimental to inflation.
Drawing a picture of a global black conspiracy aimed at overthrowing Turkey, Erdogan said the country could not defeat economists, “opportunists” and “global economists” who demanded higher interest rates.
The government is prioritizing economic growth, he said, in order to boost spending, manufacturing, exports and employment. “That is why we do not pay attention to the noise of slanderers,” he said.
He likened the struggle to a civil war against a foreign nation after the first world war, which reached its climax in the modern-day republic of Turkey in 1923. “With God’s help and the support of our people, we will. has won the battle for economic independence, ”he said.
The financial crisis has sparked outrage among Turkish opposition parties, including those led by allies of the Turkish President.
Ali Babacan, who for many years has been a wealthy man in Erdogan’s government and is now leading the Deva opposition party, has accused him of “disrupting” the country.
Ahmet Davutoglu, former prime minister and interim chairman of Erdogan’s ruling Justice and Development Party, has made significant progress. “This is no longer ignorance, this is deception,” he wrote on Twitter.
Turkey’s largest bank, which has experienced a major overhaul of the President, last month he wanted to argue that the reduction in prices could help to stabilize the economy and inflation by eliminating the problem that existed in the account of this country.
Economists warn that such assumptions are wrong, and they say allowing the lira to be at risk of inflation in a country that relies heavily on imports and imports.
The fund reduced its losses briefly following reports that Erdogan was meeting with central bank officials. However, it started to decline again after the central bank issued a statement saying the financial market move was “impossible and inconsistent with monetary policy”, but did not suggest a change in monetary policy.
Researchers at Goldman Sachs say the depreciation of the lira is driven by the negative interest rate experienced by Turkish rescuers in calculating rising inflation, rather than the departure of foreign investors or concerns over the turmoil in Turkish markets, which led to temporary sales. money. “We think the problem will only go away once the policy changes,” Goldman said in a letter to clients.
The downturn is another threat to the quality of life at a time when Erdogan is already facing public outrage over rising inflation.
A Turkish bank clerk described the lira as a “horrible thing” decided by the government.
He stated: “The decision is obvious. “They are just using their method now. This is a new approach. ”
Semih Tumen, deputy governor of the central bank who last month was among several senior officials dismissal by the president, he spoke publicly for the first time since his ouster when the money went down and called on the government to “stop this irrational experiment where there is no chance of success”.
He wrote on Twitter: “We must immediately return to the higher standards which will protect the value of the lira and the well-being of the Turkish people.”
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