Anxiety increases the demand for foreign exchange

Economist Dr. Mahfi Eğilmez answered the questions that were piling up in citizens’ minds as the election approached on his personal blog. As the government announces a new measure to hold the dollar until the elections almost every day, everyone is wondering how the exchange rates will be tightened after the elections.

DEPENDS ON WHO WINS

Eğilmez said that as the elections approach, it is necessary to accept the rise in exchange rates as normal: “People don’t like uncertainty, they get nervous. Anxiety increases the demand for currency and gold, thus increasing the exchange rate and the price of gold. The answer to the question of whether the Turkish lira will lose value against foreign currencies after the elections largely depends on who will win the elections and what they will do. According to Eğilmez, if the opposition wins the elections, it will be successful in its new economic policy if it starts with structural reforms such as law reform, education reform, political party reform and agricultural reform. Eğilmez said that with the revitalization of relations with the European Union and the rapid start of reforms in the social and political fields, the inflow of external resources will begin, adding: “If the current government and the president win the elections, the current policy continue. More precisely, the current lack of politics continues, because in the current situation, there is no politics.

WHO BROUGHT THE IMF PHASE?

Eğilmez also referred to the bad image of the IMF created by politicians in his article, saying: “The support that will be received from the IMF is important because it will cost more and be cheaper than the debt that can be obtained from the market. The central issue is not to take the country to the IMF, but to reveal the issue of who led the country to the stage of asking for support from the IMF, with what mistakes”.

We will realize the economic crisis.

Economist Mahfi Eğilmez stated that citizens were not unemployed as in the 2001 crisis and that companies that made huge profits due to low interest rates were unaware of the current crisis due to salary increases made to their employees and He said: “Turkey is experiencing a kind of ‘postponed crisis.’ Consumption, which has been brought forward with the concern that “it will be more expensive in the future”, keeps the economy alive and prevents the crisis from being noticed. According to Eğilmez, the real awareness of the crisis will come after the elections.

If the interest rate increase is done correctly, it will not be a problem.

MAHFİ Eğilmez stressed the need to start a structural reform movement with the transition to orthodox policies that will increase the policy interest rate against post-election inflation. Eğilmez said: “Raising the interest rate to the level of inflation in a single move like that can cause a crisis” and argued that it would be the best approach to gradually increase interest rates and emphasize that they will continue to rise until inflation is reduced. Eğilmez said: “If the interest rate increases with the right approach, there will be no crisis. It certainly needs to be done with a fully independent Central Bank and new staff. People and institutions must not have reputational problems when making and implementing such decisions.