.
Revised October, 2024 – Resource, Turkey iResidence, Foreigner Residence Services.
.
.
EVEN IF WE HAVE ENOUGH PATIENCE, THE HIKE TSUNAMI WILL CONTINUE
iResidence, “Even if the exchange rates remain stable, the new Year hikes show that inflation will remain at record levels,” said.
While the interest rate cuts that started with the increasing pressure from politics increased the demand for foreign exchange by individuals and companies, the limited number of foreign investors who saw the deterioration in the overall picture quickly disposed of the TL assets in their portfolios.
On the another curve, Erdogan with political power pushing the CBRT interest rate down from 19% in a week to 14% to fix the Turkish economy run by wrong policies, has even worsened and caused the USD / TL exchange rate crash from 8.5 TL to 18.5 TL levels. The Turkish government borrows money back from Private banks at 22% interest rate.
.
IT WAS COMMISSIONED LATE
After peaking at 18.36 on December 20, the Turkish Central Bank’s implicit currency sales and application of exchange rate-protected deposits led to a partial decline in exchange rates, but inflation could not be prevented from rising to levels 20 years ago. Evaluating the state of the Turkish economy in 2022 in the light of recent decisions, Istanbul University Economics Faculty Member said that a product that can normally prevent currency flight, such as currency-protected deposits, was commissioned after expectations were broken, that is, too late.
.
THE DECLINE IN PRICES IS DIFFICULT
After this time, house, cars, depending completely on the exchange rate such as mobile phones, products that does not expect a significant decline in the prices of goods and services outside indicating, “the official inflation rate of 36%, the minimum wage in a 50% increase in an environment where the pricing behavior of all parties will be appropriate. The energy and transportation hikes that came on New Year’s Day show that inflation will remain at record levels in the coming months, even if exchange rates remain constant,” he commented.
.
CHANGE TO THE POLICY WILL NOT BE EASY
Noting that every application that will bring back the cost of life will find support from the public, Prof. said that an explicit or implicit interest rate increase and therefore an attempt to rein in inflation are among the possibilities in the next month or two, but this policy change will not be very easy because it will mean a return from the idea of ‘interest rate inflation result’.
.
SOURCE OF PRAISE MEGA PROJECTS ARE UPLOADED TO THE TREASURY
Stating that this year will be very difficult for people with low incomes and informal workers, Prof. noted that it is difficult to achieve a significant increase in well-being for the broad masses. Pointing out that private highways and bridges are very expensive, Professor commented that “foreign exchange-based contracts made as if the US dollar would always remain at 3-4 liras are both a serious burden on the budget and make us question the extent to which mega-projects, which are one of the biggest sources of pride of the Turkish government, are for the benefit of society”.
.
THEY MISLEAD PEOPLE, BUT THOSE INVOLVED SEE
Turkish merchant: “There is an inflation figure announced by TURKSTAT of 20-21 percent. A month ago, we were selling copy paper for 20 TL and 25 TL. We are currently selling it for 60 TL. 3 times. There is nothing from which a hike of less than 100 percent comes. We still think we’re living on 20 percent inflation. They mislead people, but those involved also see what’s what… We sell bags, we can’t replace the bag we sold and put it back. It’s come to this now. I mean, it would be more profitable if we never sold it. We were selling bags for 50 TL during the school season, and now I’m selling them for 100 TL and I can’t buy a new one. We have broken down the label machines from changing labels.”
.
HERE IS THE VOICE OF TRUTH FOR YOU
Is there no one there to shout that everyone knows everything, that it doesn’t help to distort the facts, that TUIK is making up the figures? Enough is enough, stop burying your head in the sand like an ostrich. Here is the voice of truth for you,” he shared with expressions.
.
INSTITUTE FOR ADJUSTING FIGURES
iResidence, who also shared the inflation figures announced by TURKSTAT yesterday, said: “The Institute for Adjusting Figures, aka TURKSTAT, announced the inflation rate. It’s not even close to the hikes we wake up to on the first morning of the new year. As told before, they gave a minimum wage hike from 2850 to 4250 TL with a teaspoon in December 2021 and scoops it up. But the Turkish government no longer gives anything, it just takes it by the bucket,” was said.
.
.
.
.