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Politicians say President’s television program has cost Turkey TL 90 billion

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CENTRAL BANK OF TURKEY INTEREST RATES

In a television interview President ERDOGAN said: “I’ve met with the president of the CBRT (Central Bank of Turkey). We have to lower interest rates.” After this statement the exchange rates went out of control. Politicians pointed out that the cost of the television program to the country, which caused a 20 krs (TL 0.20) increase in the exchange rate, was TL 90 billion.

They say the reason is as follows: Investors are concerned that there will be a discount in interest rates in the short term, taking into account the President’s insistence on low interest rates. From this point on, the CBRT’s Monetary Policy Board meetings on July 14 and August 12 have become critical. Pressure will also increase in the markets, as the expectation will be high that there will be a rate cut at these meetings. The dollar ended the day at TL 8,5850 and the Euro at TL 10,4750. The TL depreciated 3.3 percent against the dollar in one day.

IF THEY CUT INTEREST RATES, THEY CAN’T KEEP CURRENCY RATES UNDER CONTROL

Mr. ATILLA YESILADA, a prominent economist said “I do not expect interest rate cuts, not only in July, August, but for the rest of the year, as well adding the president of the CBRT could reduce interest rates, but if this were done, it would not be possible to keep exchange rates even at current levels.” He said that is the reason why he does not expect interest rate cuts. Pointing to the increase in commodity prices, he said, ”We cannot see inflation below 17 percent in Turkey for the year, therefore we cannot lower interest rates either.

(source: sozcu.com.tr/2021/ekonomi/bir-gecenin-faturasi-90-milyar-tl-oldu-6465833)

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