The dollar exceeded 23 liras, Erdogan’s words were back on the agenda

While the dollar/TL has completely moved away from the flat course that it was trading in the narrow band ahead of the election with a structure controlled by the public, the Turkish lira (TL) started the day depreciating by more than 7 percent against the dollar today.

Bankers say the Turkish lira, which held higher than it should have been before the election, has depreciated on signs of normalization and depreciation may continue.

Following the depreciation of the Turkish lira, President Recep Tayyip Erdoğan’s statements after the Cabinet Meeting of the Cabinet of Ministers on November 21, 2021, where he announced the new economic program, were back on the agenda.

WHAT DID HE SAY?

“We do not respect the prescriptions of mandated economists“said Erdogan, then”I would like to stress once again that with this policy we know very well what we are doing, why we are doing it, how we are doing it, what risks we are facing and what we will achieve in the end.” he said.

When Erdogan made this statement, the dollar was at 11.06 lira and the euro was at 12.48 lira. Since then, the Turkish lira has lost more than 100 percent of its value.

While the increase in the exchange rate caused inflation to explode, the purchasing power of the people was eroding day by day.

To those who criticize the applied economic policy, Erdoğan said:The mandate economists and the mandate politicians in our country are trying to portray this biggest economic liberation struggle of Turkey in the history of the republic as the opposite.By saying, “the process was the opposite of what Erdogan did for two years, and at this point, our national currency depreciated 7 percent in one day.

A month after announcing the new economic program, Erdogan said: “Because of the increase in the exchange rate,I always have a phrase, ‘Money flows in bed’, we must pay attention to that. And now he finds this bed, he has found it, it will be better, we are in no hurry. You know, it went below 10 at one time, I think it’s around 11 right now. In this stable way we will achieve it with all our advisory councils, with the solidarity of our Finance, Treasury and Central Bank, and with our contributions. It helps to continue on the path with patience.” saying.

THE END OF PATIENCE U-TURN

In the statement made on March 28, 2022, exactly four months after the announcement of the new economy program, “We are implementing a program that will place Turkey among the top 10 economies in the world. Our problems are temporary, but remember, our gains are permanent. Our hope is alive, our future is bright. We know very well what we are doing, why we are doing it, how we will achieve it and what we will achieve in the end. We only ask our people to be patient and trust us.” he said.

In early 2022, “Slowly, gradually, without haste, the exchange rate will also decrease, the interest rate will fall in the same way and I hope that 2022 will be our brightest year,” Erdogan said. We closely follow those who seek profit. We are determined to settle the accounts of these insatiable people, who have shaped the future of our nation. I hope for a little more patience and greater support from my nation for our fight.” he stated.

In February 2023 “My field is economics, the result is obvious.Recep Tayyip Erdoğan, who was re-elected as president in May, appointed Mehmet Şimşek as Minister of Finance and Finance to combat economic problems caused by permanent inflation and the melting of billions of dollars in foreign exchange reserves.

In addition to encouraging banks to provide cheap loans, the implemented policies caused many foreign investors to leave Turkey. According to the market, this process left Şimşek with a complex problem to solve. Lightning “Türkiye has no choice but to return to a rational footing.” he said.

The markets interpreted these statements as the first signs of the transition from a structure criticized as unsustainable in economic policies to normalization.

Then, the markets began to expect the changes in the management of the regulatory institutions of banking and capital markets, the Turkish Wealth Fund and public banks, especially the Central Bank. After the appointments, the markets will follow the details of the policies to be implemented. In this context, the medium-term program that Şimşek said they started working on will be among the texts that are expected to come to light.