• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

May 9, 2025

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

    May 9, 2025

    OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

    May 9, 2025

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»World»Turkey Hikes Interest Rates, Lira Plunges as Erdogan Reverses Disastrous Policies
World

Turkey Hikes Interest Rates, Lira Plunges as Erdogan Reverses Disastrous Policies

June 26, 2023No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email

The Central Bank of Turkey hiked interest rates for the first time in 27 months on Thursday, reversing a key economic policy that President Recep Tayyip Erdogan stubbornly defended throughout his turbulent reelection campaign.

Erdogan’s surprise flip-flop on interest rates did little to help Turkey’s imperiled economy, as the lira fell to all-time lows on Friday.

Erdogan defiantly refused to raise interest rates to bring down inflation, one of the tactics generally endorsed by economists. The Turkish president insisted he could somehow lower interest rates and inflation at the same time, on the theory that businesses would take advantage of low interest rates to borrow money they could use for expansion, creating more jobs and blunting the effect of inflation by increasing supply to lower prices.

Few economists agreed with Erdogan’s theory, or were impressed by his boast that he was able to reduce inflation from 80 percent last year to 45 percent during his re-election campaign. The lira crashed as soon as Erdogan’s re-election last month was secure.

A month later, inflation remains above 40 percent, so Erdogan’s new central bank chief Hafize Gaye Erkan finally threw in the towel and hiked interest rates from 8.5 percent to 15 percent.

Erdogan immediately fired every central bank governor who tried to raise interest rates over the past three years, but Erkan – a 44-year-old Princeton-trained former Wall Street executive, and the first female central bank governor in Turkey’s history – appears to have been recruited specifically to reverse Erdogan’s delusional policies and bring some peace of mind to nervous Turkish investors.

ISTANBUL, TURKEY - NOVEMBER 21: Turkish Lira currency is seen on November 21, 2017 in Istanbul, Turkey. The Turkish Lira plunged to a record low of 3.978 against the dollar in early Tuesday trading. Concern's over deteriorating relations with the U.S. and the central bank continue to effect Turkish markets. (Photo by Chris McGrath/Getty Images)

Turkish Lira currency is seen on November 21, 2017, in Istanbul, Turkey. (Photo by Chris McGrath/Getty Images)

The 6.5 percent hike was just large enough to rattle the Turkish business sector by making it appear Erdogan had lost his nerve, but not large enough to affect inflation by much. The lira plunged 8.5 percent to a record low of 25.74 against the dollar on Friday before recovering a little in the afternoon.

See also  Found Key Leads To Person Of Interest In Texas Girl's Killing

“The transition appears to be more gradual than we had thought,” Goldman Sachs said delicately on Friday, speaking for many analysts who were expecting a much larger interest rate hike – something on the order of 20 percent, rather than the 15 percent Erkan delivered.

Central bank executives hinted more interest rate hikes are coming, while Turkish officials said it was necessary to proceed slowly to avoid chaos in the banking sector. The Central Bank of Turkey’s monetary policy committee said it intends to bring inflation down to five percent, which could require interest rates of 40 percent or higher.

University of Liverpool senior political lecturer Ozge Zhinioglu told the BBC that Erdogan clearly “has to do something for the economy,” but if he moves too quickly to embrace “orthodox economic policies” by sharply raising interest rates, the effects would “hit a large section of society, and he wouldn’t want to have that impact on local elections.” 

As Zhinioglu pointed out, it would be impossible to raise interest rates so dramatically without having a dramatic effect on Turkish households. During the presidential election, Erdogan’s leading opponent Kemal Kilicdaroglu blasted the incumbent president for creating an economy where working people run up huge balances on their low-interest credit cards just to buy fuel and food at inflationary prices.

People wait for a bus in front of a poster showing the portrait of Turkey’s President Recep Tayyip Erdogan on May 10, 2023, in Istanbul, Turkey. Erdogan has been in power for more than two decades — first as prime minister, than as president — but his popularity has recently taken a hit due to Turkey’s ongoing economic crisis. (Photo by Burak Kara/Getty Images)

On the other hand, emerging markets analyst Timothy Ash warned that if Erkan does not “front-load rate hikes” immediately, she might find herself “always playing catch-up with the market and waiting in the ante-room of the presidential palace to plead for rate hikes.”

See also  Cyclone Mocha Heads For Myanmar, Bangladesh. Evacuation Ordered

The Financial Times reported Turkish investors were unimpressed by Erkan’s “baby step in the right direction,” and they are skeptical Erdogan will ever allow Erkan and Finance Minister Mehmet Simsek to do what really needs to be done.

In addition to raising interest rates, Simsek promised to move Turkey into a “free foreign currency regime,” which would mean lifting regulations that have made it difficult for Turkish firms and consumers to build foreign currency reserves.

JPMorgan warned that Turkey’s current trajectory, inflation will hit 50 percent by the end of 2023, exceeding its previous forecast of 45.5 percent.

Disastrous Erdogan hikes interest lira Plunges Policies rates Reverses Turkey
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

May 7, 2025

EXCLUSIVE: IBM Pulls Plug On Left-Wing Ad Policies After Taking Heat From Conservative Orgs

April 29, 2025

Contradicting Past Policies, China Bets on Its Private Sector to Boost Its Economy 

February 22, 2025

‘DEI Isn’t For Us’: Some Black-Owned Businesses Say Diversity Policies Don’t Work

February 18, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Hugh Jackman shows off new Wolverine look ahead of Deadpool 3 production

May 12, 2023

‘The Wonder Years’ Canceled at ABC After 2 Seasons

September 16, 2023

Farhan Akhtar Updates Excel Slate, ‘Don 3,’ ‘Jee Le Zara’

September 22, 2023

Cathie Wood’s ARK Invest sold most of its Nvidia stake just before the chipmaker kicked off a rally that added $585 billion in market value

May 26, 2023
Don't Miss

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

Business May 9, 2025

Microsoft has banned employees from using DeepSeek — the viral Chinese chatbot it worries is…

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,112)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,628)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

45 Personality Quotes (Ideas to help you be your best self)

March 1, 2024

House Democrats Release Evidence And Catch James Comer In A New Lie

September 9, 2023

How To Adapt For Weather Changes

May 29, 2024
Popular Posts

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

May 9, 2025

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.