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“Lira bloodbath”: Financial expert attests Erdogan's crude economic thinking

2021-04-02T09:34:38.799Z

After Erdogan's “lira bloodbath”, there was no improvement in sight in Turkey because the Turkish president had no idea about economic issues, explains a financial expert.



After Erdogan's “lira bloodbath”, there was no improvement in sight in Turkey because the Turkish president had no idea about economic issues, explains a financial expert.

Ankara - After only five months, the Turkish President Recep Tayyip Erdogan has already given up his trump card in the game about Turkey's fickle monetary policy: In the midst of the accelerated slump in the lira, he dismissed his central bank boss and lira- Hope bearer Murat Uysal.

Experts spoke of a "bloodbath for the Turkish lira".

The layoff caused the lira to hit a new record low in trading with the US dollar.

An expert now locates the causes of the Turkish currency crisis in the twisted views of the authoritarian ruling AKP head of state in Turkey.

When the lira temporarily plunged 15 percent against the US dollar last week, Erdogan called on his compatriots with an unusual proposal: The Turks should invest their foreign currency and gold reserves to stimulate the economy, he demanded and appointed the former AKP - Deputy Sahap Kavcioglu as the new head of the central bank - this is the fourth central bank president in two years.

 “Lira bloodbath” in Turkey: Erdogan's “wrong ideas”: low interest rates at all costs

Kavcioglu will also find it difficult to find a way out of the crisis in Turkey, "because politics does not allow that," fears Ulrich Leuchtmann.

He is a currency expert at Commerzbank and blames Erdogan's strange economic theories.

Erdogan wants to fight inflation and stabilize the lira with low interest rates, he explains in an interview with

Der Spiegel

.

“He actually has a wrong idea of ​​the economic context.

He seems firmly convinced that rate cuts will also depress inflation.

But: That is wrong, ”says Leuchtmann.

Leuchtmann explains Erdogan's very own idea of ​​monetary policy in the

Spiegel

as follows: The Turkish president simply looked at which countries have low interest rates and which countries have high interest rates, which countries have low inflation and which have high inflation.

“The problem with this is that you can of course easily swap cause and effect,” says Leuchtmann.

Erdogan's "Lira bloodbath" in Turkey: "Risk can no longer be precisely determined"

As long as Erdogan continues to adhere to this course of low interest rates, which is increasingly becoming a burden for the domestic economy, little will change in Turkey, Leuchtmann is certain.

Neither the new central bank president Sahap Kavcioglu nor any other, more conservative central banker could get the crisis under control as long as AKP head of state Erdogan ruled.

Leuchtmann is forecasting a dollar rate of ten lira by the end of the year.

“But basically the lira risk can no longer be determined exactly.

This risk remains as long as there is no regime change. "

Source: merkur

All news articles on 2021-04-02

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