The Central Bank’s Monetary Policy Committee made a radical move, encouraged by the fact that the US Federal Reserve kept interest rates constant. He raised the interest rate by 200 basis points, or 2 percent to correct it, and reached 19 percent, beating the expectations of even the financiers.
So what is the bill? It is obvious that such an increase in interest rates will put even more pressure on the real sector and increase its costs, increase the problems related to payments, and also reduce the domestic market.
While playing this risky gamble, the Central Bank made one last effort, which is poorly described as a golden coup. It would not be very misleading to say this. Because, if the accounts are not kept in mind, the door has been opened to a process, which is very expensive and in which control will be lost, the spiral of interests.
But before reading this movement, it is necessary to share a data published the same day with the decision on the interest rate. Turkey’s open international currency position … According to the latest data minus the total deficit of 392.4 billion to ekonomiyiz.
However, when you read the composition properly, you see that assets increased 2.3 percent and liabilities decreased 0.9 percent. Although there is a positive decrease in this initial plan as well, the thing is that that money comes out of the couple’s house and tells us that Turkey has a difficult time finding debts.
That is, the Central Bank knows that the incoming money of 15-20 billion dollars is not permanent, it has a dishonest characteristic and a healthy flow of foreign money will not reach the country. This movement is based on a fiction.
The first of them is that inflation will enter a downward trend from May, this will reduce the pressure on interest and create an environment for interest rates to fall. However, it is possible to say that inflation will not be calculated when factors such as the gap between the producer and consumer price index, the increase in input costs and the increase in the price of a barrel of oil are put in.
It is inevitable that this will generate a new pressure of interest in the next period. In other words, if the inflation targets are not reached in the first heading of the account, there will be a great dilemma and pressure within the triangle of inflation, interest and exchange rate.
This is the meaning of the second movement and an increase in interest rates above expectations. It must be calculated that with a strong demonstration towards radical tightening, foreign currency deposits in Turkey will dissolve with loss of hope.
If these accounts are dissolved and the return to TL accelerates, it is thought that the pressure can be reduced by bringing in cheap foreign exchange reserves, especially the dollar, in the process. Of course, what is supposed to be victimized here are household savers. It is also a topic of discussion.
Because those who resort to currency deposits are not ordinary citizens who just want to save. Those with liabilities in foreign currency predominate, from banks to private sector companies.
What if you don’t have an account? What if the foreign currency deposits are not resolved at the desired rate and inflation does not decrease as calculated? First, the demand for foreign exchange, which is needed in the short term, raises the rate, and the high exchange rate triggers additional inflation. Rising inflation also blows up interest with new demand. It’s a complete vicious cycle.
Do you have this account? Everything is calculated on such paper that it seems difficult. Despite the above movements, the thaw circulated within $ 5 billion and deposits did not fall below $ 230 billion.
Despite the hot money received for interest and earnings, no results were obtained. If this resolution cannot be achieved by raising interest rates more than expected, there will be a big bang. Also, all this calculation is done on the emphasis in normal conditions.
If it does not mean preventing the pressure of geopolitical risks, they will also be at risk of sanctions to regional developments. They said that hope is the bread of the poor. It is not known if this account is valid.
But even if the account is in a fragile economic situation and Turkey is now clear that it had to sit in a tabletop format to save the situation that it shows us.