Erdogan said ‘the one who buys dollars stays standing’, but the one who listens to him stays
The Turkish economy is going through difficult times. After the elections, the Turkish lira hit record lows against foreign currencies, losing 30 percent in value in the past month.
The dollar exchange rate, which was at the level of 19.50 liras before the May 14 elections, exceeded 20 liras after the second round of the presidential elections on May 28. In the intervening period, record levels were seen in the Turkish lira, dollar and euro, all of which continually lost value. While the dollar saw 26 lira and the euro 28 lira, eyes turned to President Recep Tayyip Erdoğan. In the past, ‘I am responsible for Turkey’s economy!’ The silence of Erdogan is striking, who said, and upset the balances in the economy with the low-interest policy that he has implemented in the last year and a half.
‘THE DOLLARS ARE IN PEDESTRIAN’
However, Erdogan had brought a very assertive statement to Turkey’s political and economic history early in the process, when the exchange rate began to gain value against the LT. Responding to questions from journalists in Ankara after the Friday prayer on March 6, 2015, when the dollar broke the record by seeing the level of 2 lira 64 cents against the Turkish lira, he said: “At the moment , especially those who invest in interest lobbying or invest excessively in the dollar, can be left on their feet. They should know this,” he said. Erdogan’s words also made headlines in secondary newspapers on the same day.
Since Erdogan’s words ‘whoever buys dollars stays standing’, the Turkish lira has lost 10 times its value against the dollar, breaking above the 26 lira level.
While the increase in the exchange rate, the increase in the cost of living and uncertainty accelerate the deterioration of the economy, millions of citizens, from bosses to employees, from young to old, are watching the events with concern.
So, what did AKP President and President Recep Tayyip Erdoğan say against the increase in foreign exchange and interest rate policy in the past?
These are Erdogan’s comments on the dollar exchange rate, which are just as startling:
‘CENTRAL BANK PLEASED’
FEBRUARY 2015: The head of the Central Bank is good, nice, etc. I look at the kindness with what they do, I don’t look at it with their own physique. Yesterday the Central Bank kindly reduced the policy rate by a quarter of a point, in the year the sum of all of them was 2.5 points. In January there was an increase of 5.5 points in 1 item. Half of the January rise has not been discounted. Does such a thing happen? We do not have a word for the independence of the Central Bank. You are fighting for independence against us, but you depend on other places?
‘TOMORROW THEY WILL CURRENTLY SAY JUMP’
MARCH 2015: As president, I can criticize, I can. No one has the authority to interfere with this. [Dönemin Merkez Bankası Başkanı Erdem Başçı’na sesleniyor] Now, although these caveats have been made here, tidy up a bit. I say that interest is the cause and inflation is the result. This is my thesis. It says that inflation is the cause, interest is the result. If inflation falls, it will lower interest rates. This means that you are on the wrong path. There is no point in making fun of these people, entrepreneurs and investors. If you try to check inflation 3-4 times a year, it means there is a water leak somewhere. But what are you doing, raising words against the President and those who speak against him. Tomorrow they will say that the currency has jumped again, okay, take precaution. You cannot continue this business by acting in accordance with the decisions made by the Western powers, you cannot act with the instructions given by the interest lobby.
NOVEMBER 2016: Let’s put gold into action together in the international arena. We need to save the markets from currency pressure. Let’s find ways to borrow that way while we borrow, let’s find ways to borrow in local currencies. We must get through this process together, we must get through this together. This land is ours, this land is ours. We are all brothers, we will overcome this process together in solidarity. Remember, this nation, which has experienced and successfully overcome the vilest coup attempt, the most insidious invasion attempt, and the bloodiest terrorist attack in recent history, will of course defend itself against economic pressures.
‘I LOVE YOU FOR GOD…’
DECEMBER 2016: You know, recently, they brought up a currency issue. The dollar was like that, that’s how it happened. Whatever happens. I remind my people of this. My dear nation, I love you for the love of Allah. Those who have currencies under their pillows, turn their money into gold. Let him come and turn his money into TL. The Turkish lira gains value. Gold gains value. What is the need, we will go, we will add value to the currency. Come do this. As long as we take this step, someone’s game will be broken. Don’t worry. Let’s break this game soon. They did this before. They did it in 2007-2008 too, so what did I say? I said it’s going to be tangential. I’m saying the same thing again. The tangent will pass.
‘GIVE THIS AUTHORITY TO YOUR BROTHER’
JUNE 2018: This kind of change or something like that, none of these things determine our future. We will determine our future. Some circles are persistently trying to accumulate dark clouds over Türkiye. However, the Turkish economy is vulnerable to these types of attacks. Give the authority to this brother on the 24th, then you will see how to deal with this interest with this and that. Japan operates at negative interest rates. You arrive in the United States at two, you didn’t know, at three… Their banks work like that, what’s wrong with us? Right now it is in the 20s to the 25s. Can you invest in a country where the interest rate is like this? Friends, let’s change this, this business is pointless. Three hit points, another one and a half points behind. Now some of them say, ‘Sir, don’t wear them on election eve, don’t talk.’ What am I not going to talk about?
IF THEY HAVE DOLLAR, WE HAVE GOD
AUGUST 2018: Today we will be better than yesterday, tomorrow we will be better than today. Don’t worry. Several campaigns are ongoing. Don’t listen to these campaigns. Don’t forget that if they have dollars, we also have our people, our rights, our God. We will work hard, we will run hard. Hopefully, we will enter 2023 differently. I have faith, I have faith.
‘He WASN’T LISTENING…’
NOVEMBER 2019: I said that there is no other way than to lower that interest rate, I said that as we lower it, inflation will decrease, I said that growth will accelerate. Now, when the system changed, we got the authority to remove the head of the Central Bank, he was not listening. We continue with the new friend, we said that we are going to lower interest rates. Interest is the greatest cruelty in development, it stops production, it prevents you from growing, the climate changes when steps are taken.
‘WE NEED TO DRINK THE PAIN MEDICINE’
NOVEMBER 2020: We are not refraining from taking the steps that must be taken today so that our nation can look with confidence to its future. We are also aware that we need to drink some bitter medicine at this stage if necessary. It is within this framework that I evaluate the rate hike decision taken yesterday. Our main objective is to bring inflation down to single digits as soon as possible, and then to our medium-term objective level, and to ensure that interest rates fall accordingly. When this is achieved, I think the exchange rate will stabilize. It is imperative that we get Turkey out of the interest rate-inflation spiral. Otherwise, we will have to live this discussion all the time and we will have to pay these prices. I say it all the time, and I say it again here today: interest is the cause, inflation is the result. Know it like this
WHAT IT REQUIRES HOW…
NOVEMBER 2021: As long as I am in this position, I will continue my fight against interest to the end. What is clear about this? What happens to you, to me, now that you’re in the middle? What is it, sir? We were lowering interest rates. Don’t expect anything more from me. As a Muslim, I will continue to do whatever it takes. Alhamdulillah we are on the right path. Because the rule that interest makes the rich richer and the poor poorer is not an ordinary rule for us.
WE WILL SETTLE LOCAL
DECEMBER 2021: 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 is good to continue with patience.
CURRENTLY THE INTEREST WILL LOWER
JANUARY 2022: Little by little, little by little, without haste, the exchange rate will also go down, interest rates will go down in the same way, and 2022 will be our brightest year, I hope.
JULY 2022: 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.
MY FIELD ECONOMY RESULT IS IN THE MIDDLE
FEBRUARY 2023: Interest and inflation are directly proportional, interest is the cause, inflation is the result. There may be people who do not believe it, so I believe it. If it’s Alan, my field is also economics and the result is obvious.