If Erdogan hadn’t lowered interest rates and made dollar TL rate jump, how much would fuel oil be today?

Journalist Alaattin Aktas (from Dünya Newspaper) calculated the effect of interest rate cuts President Erdogan instructed the Central Bank to make, on gasoline and diesel prices. Aktas calculated that if Erdogan’s interest rate cuts and the resulting currency crisis had never happened, the dollar would have risen by about 12 percent in six months from 8.50 to 9.50.

In this scenario, the increase in the exchange rate and oil prices would be 79 percent per barrel. In this case, which can be considered standard, a price of 14 liras would appear in gasoline and 13-15 TL in diesel.

After this calculation, Aktas continued in his column: “Gasoline today is 20 TL, it should have been about 14, we are paying 6 TL more. The diesel costs 23 TL today, it should have been about 15, we are paying 8 TL more.

Why are we overpaying so much? Because we have reduced interest rates!. So, who benefited from this reduction in interest rates and how?

Interest rate cuts

The Central Bank had made a total of 500 basis points of interest rate cuts from September till December, due to political pressure. As a result of these discounts, the loss suffered by TL only last year is more than 45 percent.

The escalation in inflation is also in full swing due to the currency crisis caused by interest rate cuts.

Official data show that inflation reached 54.44 percent in February. According to independent research institutions, the figure is in three digits.

In his article, Aktas also stated that the increase in inflation by 1.5 points has already been finalized due to the current hikes.

SOURCE – Translated from article on below link:
diken.com.tr/erdogan-faiz-indirip-dolari-ziplatmasaydi-benzin-ve-motorin-bugun-ne-kadar-olurdu/