The Turkish lira is mired in a whirlpool of exchange rates, interest and inflation

0
17


The Turkish lira entered a race with President Recep Tayyip Erdogan’s repeated statements about interest cuts and his defense of his government’s economic policy, which he described as “difficult, but not wrong”, and his assertion that Turkey faces speculation in exchange and interest rates.

The Turkish lira rolled violently in early trading, yesterday (Wednesday), and reached its lowest level ever at the level of 14 lira against the dollar after Erdogan repeated his defense of a new economic model based on lowering interest rates despite the high inflation rate, which is approaching of 20 per cent.

The lira, which has lost more than 46 percent of its value since the beginning of this year, fell to the level of 13.87 against the dollar, the day before yesterday, in conjunction with the comments made by Erdogan in an interview with Turkish state television, down from 12.80 from Monday’s closing, But it showed a weak performance at the level of 14 pounds to the dollar in early trading yesterday, before the Central Bank announced its intervention in the markets to control the exchange rate.

The Turkish Central Bank announced its direct intervention in the exchange market, which eased the lira’s losses slightly and rose in late afternoon trading to the level of 12.27 lira to the dollar. The bank issued a statement yesterday, announcing a direct intervention in the foreign exchange rate, justifying this by trying to control the formation of false exchange rates, and to give more strength to the lira against the dollar and the euro.

The statement indicates that the bank pumped the dollar and the euro into the markets to control their unprecedented continuous rise.

Erdogan said, during the television interview yesterday evening, that we are facing speculation in exchange and interest rates, and only we can confront this, adding, “Whenever Turkey is interested in getting out of the high interest rate system, it faces pressures with such speculation and manipulation.”

Erdogan addressed the new economic model, which is based on lowering interest rates, stressing that it is the interest system that makes the rich richer and the poor poorer. “We have prevented our country from getting into trouble in this way, and we will not allow it… Here we are facing speculation in exchange rates, and then no one but us will confront that,” he said.

He added, “There are short-term global financial funds that enter the country to achieve high profits from the interests,” noting that “these hot money can temporarily lower the exchange rate, but it is not an ideal situation.”

“This is how we fell into a spiral of exchange rates, interest and inflation, but we will not continue to do so, and we will not allow them to impede investment and production, and we will not allow them to destabilize growth and we will get out of this spiral.” Erdogan said, “Turkey has changed and is no longer the old Turkey, and will not succumb to the economic threats that are made through the financial markets. Our real economy has the strength and ability to completely neutralize these threats.”

“We can easily stand against these threats,” he added. We can no longer be weakened and prevented by currency manipulations. We have emphasized at the National Security Council that we are aware of these threats and that we are strong and intent on taking action against them.”

The Turkish president considered that the basic indicators of the economy are very strong, pointing out that there are those who seek to show these indicators are weak, adding, “Turkey’s economic data is not weak, but on the contrary, it is at its best,” adding, “Our country has reached a point with which it can break This is a vicious cycle, and there is no turning back after that.”

He considered that the time has come for foreign investors who trust Turkey’s strong economic dynamics to invest in long-term projects, noting that important foreign investors, who have seen these opportunities offered by the Turkish economy to them, have already begun to move in order to establish large-scale investments in Turkey.

He pointed out that his government’s goal is to provide loans worth 10 billion dollars to more than 11,000 active companies in Turkey at the earliest opportunity; In order to open the way for the creation of 50 thousand new job opportunities.








LEAVE A REPLY

Please enter your comment!
Please enter your name here