The continued depreciation of the Turkish lira on Monday prompted generally cautious traders to break their silence, while President Recep Tayyip Erdogan was determined to cut interest rates.
In the wake of Erdogan’s commitment, the Turkish Chamber of Commerce, which represents about 85% of export companies, has called for a revision of the monetary policy that is pushing the economy and the country into the abyss.
The Turkish lira fell again on Monday morning as it lost 6% of its value against the dollar and recorded an unprecedented fall of 17.5 lira against the dollar, losing more than 57% of its value against the dollar from the start. January.
The new slump came after the head of state’s statements released on Sunday evening, but were recorded on Saturday, in which he confirmed that he would not raise interest rates to stabilize the exchange rate.
Erdogan attributed his decision to the teachings of Islam, which forbids usury: “As a Muslim, I will do what our religion commands me to do.”
Thus, Erdogan responded to the Turkish Chamber of Commerce, which appealed to him last weekend to address the crisis.
“The political choices made have created new difficulties not only for the business world but also for our citizens,” the Exporters Association wrote in an online statement.
“The lira’s warn of significant depreciation, acceleration of inflation, pressure on investment, growth and employment and the risks to our country’s poverty,” he reiterated.
“In view of this, it is necessary to assess the damage to the economy and return to the economic principles established within the framework of the market economy,” he added.
Accepting the invitation, Erdogan recorded a video broadcast Sunday evening in which he said, “They are complaining about interest rate cuts. But do not expect anything else from me.”
The central bank, which has fired its three governors since 2019, is currently under pressure from the president to cut interest rates to 14%, with the annual inflation rate set to be 21% and 30% in the coming months. According to economists.
Opposition parties have accused the National Statistics Office of deliberately slashing inflation, with prices of essential commodities such as sunflower oil rising by 50% a year.
The Turks are trying to convert their local currency into dollars and gold to protect their purchasing power.
The traders’ organization condemned the “loss of confidence and the volatile environment” and stressed that “the great demand for foreign currencies is blocking all other economic balances.”
The images were widely circulated and were recently commented on in Turkey, showing long queues in front of bread warehouses backed by opposition municipalities, especially in Ankara and Istanbul where bread is sold at half price.
In this context, the President has announced a 50% increase in the minimum wage to 4,250 lira (240 euros) from next year.
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