[Spoonman]

...it seems that Sultan Tayyip Erdogan's economic policy is causing the Turkish Lira to freefall in value.

The Turkish lira nose-dived 15% on Tuesday after President Tayyip Erdogan defended a controversial plan to cut interest rates to boost the economy.

The currency hit a record low of just over 13 lira to the dollar, before recovering slightly, marking 11 straight days of falls.

Mr Erdogan has pushed Turkey's central bank to make three rate cuts since September, the most recent last week.

But this has been blamed for driving up inflation which is now at 20%.

Investors are losing confidence and the lira has shed some 45% of its value this year, making it the world's worst performing currency.

Despite this, Mr Erdogan vowed to stick to his policies on Monday, arguing that high interest rates would not lower inflation - an unorthodox view he has repeated for years.

"I reject policies that will contract our country, weaken it, condemn our people to unemployment, hunger and poverty," he said after a cabinet meeting.

"We see the game played by those over the currency, interest and price hikes... and show our will to proceed with our own game plan," he added.

The president and his allies argue that lower interest rates will boost Turkish exports, investment and jobs. But many economists say the rate cuts are reckless.

https://www.bbc.co.uk/news/business-59390250

It was almost TRY17.5 to the pound yesterday morning, it's rebounded slightly now towards GBP1 to TRY16, but as a comparison when Erdogan became President of Turkey in August 2014 it was GBP1 to TRY3.58, while back in February this year it managed to go under TRY10 to the pound. Such a devaluing currency might help with exports and the tourist industry (if the current pandemic wasn't a factor), but it's bound to have an effect on a lot of the daily expenses of ordinary Turks when it comes to imports.

https://www.xe.com/currencycharts/?from ... RY&view=1Y

[The Weeping Angel]

An economic crisis might force that bastard from power.

[mattomac]

Oh dear what a shame

[Watchman]

An economic crisis might force that bastard from power.

For supporters of politicians like Erdogan, economics is the last criteria they judge by; economics is non-populist, except when blaming “others” for taking “our” jobs

[kreuzberger]

And still, the Kreuzette remains unmoved. After what was presumably profit-taking yesterday and Weds, the Lira is back at 14:1 with our beloved Euro.

All I ask for is a week in Istanbul once the Euro-football starts up again, and the opportunity to replenish my socks and scarves for what will be the thick end of fluppence before inflation really starts to bite.

At the moment, the tea on the Kadıköy ferry will be 15¢ a glass.


Edit 23:41. There are signs of cracking. A weekend in Antalya might be on the cards. 15° in January and octopus legs are working ther magic. We'll see...

[kreuzberger]

15.5 TRY to the EUR this evening. Poor souls, this is going to hit the economy like a runaway train. That's the currency having halved in market value since Spring last year.

Even worse, the sell off seems to be gathering pace now and will attract speculators during the yo-yo that will inevitably lead to 1:20 unless Erdoğan essentially hammers the breaks on. The problem he now faces is that vultures don't much care for monetary policy, so tinkering with interest rates won't make that much difference - a lurch either way will be seen as panic. What has he got left? Forex controls? Aye, good luck with that!

In a 720 bn USD economy over-weighted towards construction, imagine earning in Lira and having taken out a Euro denominated mortgage on the basis of buying in to stability? Whether a bank, a corporation, or an innocent couple just starting out? Shudder...

[Spoonman]

15.5 TRY to the EUR this evening. <snip>

And TRY18.18 to the pound according to XE. I've a cousin who lives in Turkey, married a local man and teaches English in a local school there - going to be harder for her to make it for trips back home at the way its going, that's for sure irregardless of the current pandemic (I'm not sure if she has any sterling or Euro reserves).

[kreuzberger]

After last week's shenanigans which set an extraordinarily low bar, the Turkish lira has rollercoastered today from between 21 and a little over 15 to the euro. 29% or 40% of a swing in one day, depending upon which way you look at it, is nonetheless completely unsustainable.

One would imagine that domestic lira sellers are propping up what feeble strength that the currency now has, but the finite nature of these resources means that this cannot last for much longer. 30:1 on the euro must be in sight now, unless Erdoğan takes advantage of the Christmas and New Year break, and the subsequent lack of activity in the markets, to reverse his disastrous monetary policy. Only a mad man would not, so it now becomes a question of mental fortitude, or otherwise.

I have no interest in currency speculation, nor do I have the resources to partake of it on a meaningful scale, but we will probably gamble a few hundred euros early next week for spending money next year.

Return flights from Berlin to Istanbul for pleasant spring weekends are currently available on Skyscanner for a touch over €100.

[Spoonman]

Sultan Erdogan fires statistics boss that hurt his feelings...

Erdogan sacks statistics chief after record annual inflation

Turkish President Recep Tayyip Erdogan has sacked the head of the state statistics agency, after data showed last year’s inflation rate hit a 19-year high of 36.1 percent.

Sait Erdal Dincer, the now-former chairman of statistics institute TUIK, was just the latest in a series of economic dismissals by Erdogan, who has sacked three central bank governors since July 2019.

Erdogan has railed against high interest rates, which he believes cause inflation – the opposite of conventional economic thinking.

The 2021 inflation figure released by Dincer angered both the pro-government and opposition camps.

The opposition said it was underreported, claiming that the real cost of living increases were at least twice as high.

Erdogan meanwhile reportedly criticised the statistics agency in private for publishing data that he felt overstated the scale of Turkey’s economic malaise.

Dincer seemed to sense his impending fate.

“I sit in this office now. Tomorrow it will be someone else,” he said in an interview with the business newspaper Dunya earlier this month.

“Never mind who is the chairman. Can you imagine that hundreds of my colleagues could stomach or remain quiet about publishing an inflation rate very different from what they had established?”

“I have a responsibility to 84 million people,” he added.

https://www.aljazeera.com/economy/2022/ ... -inflation

Meanwhile, UK£1 = TRY18.17 or €1 = TRY15.12

[kreuzberger]

Erdoğan looking rather peaky this weather, both in terms of health and his outlook for the impending general election.

His demise, electoral or otherwise, can't come too soon. There is an element of "careful what you wish for" bundled up in that, but that country of warm welcomes, great food, and fine accessories for the discerning yet frugal gentleman needs an overdue break.

I'll find a boozer in Neukölln to watch the results roll in on Sunday, 14 May.

[The Weeping Angel]

The bastard's won

https://www.theguardian.com/world/live/ ... ent-runoff

[kreuzberger]

Kılıçdaroğlu, the moderate's moderate, went full-Suella in the past fortnight and he ended up with no more votes than he started with.

Ne'er mind, eh?

[Spoonman]

Aside from Russia, I see the international currency markets haven't responded well to Ergodan's recent electoral victory. Did he appoint Kwasi Kwarteng as his finance minister?

28 May 2023
£1 = TRY24.63
€1 = TRY21.40
US$1 = TRY19.97

Today (24 June 2023)
£1 = TRY32.08
€1 = TRY27.53
US$1 = TRY25.24

https://www.xe.com/currencycharts/?from ... RY&view=1M