April 1, 2023

Dubai Week

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After the collapse of the lira, the Turkish finance minister reveals a new economic model

The Turkish finance minister unveiled a new economic model set by the government, which is based on lower interest rates, which is in line with the decline. Turkish lira currency For measurement levels.

The Federation of Banks in Turkey today (Saturday) briefed Finance Minister Nourin Nabati on the new economic model for trade unions, the Banking Regulatory and Oversight Commission and directors of state-owned banks.

“Our banks will continue to use their resources to meet the financial needs of families and the real (transactional) sector through the free market mechanism,” the union said in a statement.

The lira hit a new low of over 17 pounds against the US dollar on Friday, facing higher prices after fears over a spiral of inflation caused by a new policy by President Recep Tayyip Erdogan, but it returned to a relatively high level. Following the intervention of the Turkish Central Bank, the dollar was trading at .4 16.41.

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The finance minister’s statements come as he is being called by one of the largest Turkish business organizations, without naming his name, in a bid to abandon the Turkish president’s current economic policies.

The Association of Independent Businessmen and Traders of Turkey (TUSIAD) said in a statement today that the recent market turmoil was a testament to the failure of the experience model, and that the association “emphasized the need to return to generally accepted economic rules.”

The Turkish president believes that Turkey can free itself from dependence on foreign capital inflows by abandoning old policies that prioritize higher interest rates and stronger revenues, and hopes that lower interest rates will curb consumer price growth.

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The Turkish central bank has again cut interest rates, dropping the last five, 100 basis points (1%) to 14%.

Erdogan says temporary fluctuations are the price to pay for Turkey’s economic “war of independence” against the “lords” of the International Monetary Fund and speculators.