The foreign exchange resource has dried up to the core.

Turkey began counting down the days to elect a president in the second round on May 28. Whoever wins the next elections will also win an economic crisis that must be resolved. The depth of the crisis and the magnitude of the damage will depend on the economic policies that are implemented. Economist Güldem Atabay said that if there is no change on May 28, the point at which the economy will deviate with current policies will have more serious consequences than the 2001 crisis and that the crisis will affect both the private and public sectors simultaneously. .

Stating that Turkey has reached the brink of balance of payments crisis as a result of current economic policies, Atabay stressed that the AKP government has completely depleted the foreign exchange resources in the country and a great risk has been taken with the Protected Currency Depository (KKM). Stating that the government is trying to cover up the deep economic problems with a policy of polarization, Atabay said: “If the Turkish economy does not come back in this way, it will be on the verge of a balance of payments crisis that will be bigger than the one in 2001. “. crisis, hitting the private and public sectors simultaneously, driving inflation to triple-digit levels and raising unemployment to unbearable levels,” he said.

HIGH EXCHANGE PAYMENTS

“The country’s current account deficit, that is, the 12-month foreign exchange deficit, exceeds $54 billion. The natural gas payments deferred by Russia exceed 20,000 million dollars, and it is correct to write down this figure as a bill to pay. Short-term foreign debt payments are headed toward 200 billion dollars,” Atabay said, drawing attention to the country’s high foreign exchange payments. According to Atabay, the AKP administration must continue to suppress the LT to prevent a further explosion of the budget deficit, which will exceed 1 trillion lira by the end of this year.

Guldem Atabay

Going back to the 70s would be a disaster

Güldem Atabay drew attention to the fact that ‘the safe is empty’ (CBRT reserves), CBRT reserves are negative at $75.5 billion, and stressed that the only short-term way to meet the country’s foreign exchange needs In the face of this lack of foreign exchange, in the short term, it is to make capital control official.

Atabay listed what could happen in this situation as follows: “After the conversion of all deposits in the banking system to KKM, due payments are made against an announced foreign currency value of TL. Then the exchange ban will be imposed on those who do not trade in foreign currency. Keep those who trade currencies under scrutiny. The world has already globalized economically and financially. It is a disaster for the Turkish economy to return to the 1970s after the elections.”

In the short term, production lockdown is inevitable.

Economist Güldem Atabay said: “We lowered Erdogan’s interest rate to 8.5 percent. We will reduce it even more’, they say, the interest on the deposit is at the level of 40 percent. Bank loans are limited. Net exporting companies can obtain loans if they are willing to pay foreign exchange interest in the range of 10 to 11 percent if their credibility is very high. In the short term, production lockdown is inevitable. Because the credit taps are completely closed,” he said.

The strap under the pillow began

Stating that the tension in the markets will continue to increase until the election day of May 28, Güldem Atabay said: “The sudden stop of lending has already happened. Now, if Erdogan wins after the elections, what will happen to us will come at a price. While the existence of the bilateral exchange rate and gold import bans cannot be measured numerically, it should be explained to everyone that citizens with savings accumulate currency and gold from banks under their pillows.

Risk in currency protection grows

Noting that KKM has risen by $47 billion in the last four months, when only the interest cap was lifted, Güldem Atabay said: “The cost of a possible TL depreciation for the Treasury through KKM has reached dimensions unbearable. The Erdogan government has opted for the wealth transfer that we all do with taxes and that we will do when this risk materializes, to create a false spring in the economy and thus win the elections,” he said.