"Foreign exchange-protected TL " Babacan: The open state of working for the interest rate lobby
Ali Babacan, Chairman of the Democracy and Atılım (DEVA) Party, interpreted the currency protected deposits announced to protect the TL as a "disguised interest rate increase".
Babacan said, “This is the clearest form of working with the interest lobby, in their own words. Erdogan's actions are dragging the economy of this country into a swamp," he said.
“Although the decline of the dollar has undoubtedly made our citizens happy, let's not forget that even the falling dollar rate is much higher than the level at the beginning of September. In a way, we were faced with a situation like showing death and consenting to malaria.
Secondly, it is said that
public banks were selling foreign currency intensively at the same time as the president's statements. If this is true, if public banks are selling foreign currency in this period in order to make people say, "The President has spoken, the currency has dropped", someone should come out and explain this.
The third issue is that although the new decisions announced will affect the exchange rate to some extent in the short term, they will increase the liabilities of the Treasury and the Central Bank extraordinarily. This deposit guarantee method announced will increase the public burden and increase the Treasury's debt. I know our citizens are confused. Because there is a very dangerous game in the middle.
'All money is indexed to foreign currency'
You know, in recent weeks, more than 60 percent of the total deposits in banks were foreign currency deposits. With the decision taken last night, the way was opened for the return of the remaining deposits, namely TL deposits, to be equal to the increase in foreign exchange. This is a complete dollarization of the country's economy. This practice ultimately nullifies the effect of monetary policies. By indexing the Turkish lira deposits, which have already fallen to 35-40 percent, to foreign currency, it means that all the money in the bank is no longer Turkish lira, but foreign currency or foreign currency indexed currencies.
'Increasing interest without putting name'
These are the politics of the unstable, poor Turkey of the past. In the 1970s, there were many Hacı Murats on the roads. Born in the eighties, Falcons used to roam the roads. And you would get in line, you would deposit your money a year ago, you would buy the car a year later. The decisions announced yesterday are to take Turkey back to the era of the Hacı Murats, Şahins and Doğans, nothing else. They package it and present it as a good thing. In fact, what has been explained is nothing but taking the country back to the times when the Doğan-looking Şahin was sold. These announced decisions are an implicit interest rate hike. Increasing interest without mentioning it… They do not correct the essence of the matter. They are trying to right a wrong with another wrong.
'Decision that disrupts income distribution'
The interest received by the Central Bank was reduced with the instruction, the interest paid by the Treasury was increased by exactly 8 points, a covert interest rate increase was made by guaranteeing the exchange rate jump on deposits, and all the currency risk that would arise was put on the Treasury's back. This is the clearest form of working with the interest lobby, in their own words. These are the decisions that distort the income distribution and increase inequality. Those who will benefit from this, have deposits in the bank; people with high incomes. While our low-income and fixed-income citizens, especially our employees, farmers and shopkeepers, pay the bill for these decisions, a small number of high-income people will benefit from the results of the decisions.
'We have entered a period of high inflation'
Erdogan's actions are dragging the economy of this country into a complete quagmire. For 34 years, inflation in this country was double or triple digits. In other words, the inflation period is a period in which both prices and salaries inflate, but in essence the purchasing power decreases. It is a period in which the country is constantly impoverished. Right now, Turkey has entered a period of chronic high inflation. Does the dollar rate zigzag eight up and five down in a country? There is no example in the world of what we have experienced in the last month. They left no such thing as stability in the country. If your own money is strong, if your economy is strong, this will not happen.”
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