Turkey: New dismissal in the midst of a storm

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The economic leader Waltz continues in Turkey. The head of the National Bureau of Statistics was fired this weekend as the country’s prices soared.

Sait Erdal Dincer has been criticized after the announcement of annual inflation rates earlier in the month. The highest annual inflation rate ever exceeded 36%, the highest level since September 2002. Sait Erdal Dinner explained in the Economic Daily Dunya What he had Responsibility for 84 million people And it simply couldn’t publish numbers different from what was observed by the service. And to add as a premonition: Today I am responsible for this service, tomorrow may be someone else “. I must say that he was not the first to be thanked. MeWhen Turkish President Recep Tayyip Erdogan, who wants to impose economic strategy, has already dismissed three central bank governors since 2019. He has also changed the Finance Minister three times since 2018. The last minister arrived in December in the midst of a storm.

Turkish lira tumble

Eighteen months before the presidential election, inflation is a delicate issue. Rising prices have a big impact on Turkish wallets. The already high average inflation rate of 36% is being contested by the opposition and the inflation research group ENAG... These Turkish economists evoke a percentage of 82% in a year.

Analyst Timothy Ash, Blue Bay AssetAFP quoted that the replacement of Sait Erdal Dinner was ” It only increases the lack of confidence in the official data “.

Official data detailing that the price of a particular product has already risen well above average. Flour and chicken increased by 86%, sunflower oil increased by 76%, and bread increased by 54% in one year.

Recep Tayyip Erdogan believes that high interest rates drive inflation, contrary to traditional economic theory. And under pressure from the President of Turkey, the central bank reduced its key interest rates from 19% to 14% between September and December.

This caused the Turkish lira to plummet. The currency lost 44% of its value against the dollar in 2021. But Turkey is very important. You need more books to buy the same product overseas, so the price goes up.

January’s main policy rate remains unchanged

Power, on the other hand, tries to highlight the brightest side of the coin. The devaluation of the pound boosted exports. They increased by nearly 33% in a year, boosting growth. GDP increased 7.4% year-on-year in the third quarter.

Nevertheless, inflation is not good for Recep Tayyip Erdogan’s popularity rating. The head of state said Reduce to 1 digit as soon as possible “He hasn’t turned back, but he said prices will continue to fall. gradually “Therefore, unlike the previous month, January’s main key rate was unaffected.

In addition, to reassure savers, at the end of December it was announced to create a mechanism to link certain pound-based bank deposits to the dollar rate. Then, suddenly, but temporarily, the currency rebounded.

The reasons for the metastability of the home currency against the greenback since the beginning of the year should be explored elsewhere, and many economists are instead looking to dissolve Turkey’s net foreign exchange reserves. They went from $ 21.2 billion on December 10th to $ 7.9 billion on January 7th. This suggests market intervention to support the currency.