With the rising economic crisis within Turkey, Turkish President Recep Tayyip Erdogan recently released a statement. He had requested the international investors to have faith in Turkey’s economy.
Turkey Currency Falls Sharply Against Foreign Currency
The statement comes after the President fired the Central Bank Governor Naci Agbal. He was awarded the position just a few months back which led to the fall of Turkey Currency Iira’s value against foreign currencies. Following this, the Istanbul stocks have also fallen down which has become a major concern for the investors.
In a live broadcast speech at a congress of his ruling Justice and Development Party (AKP) on Wednesday Erdogan addressed the issue. He said that the fluctuations occurring in the market in the past couple of days do not represent the fundamentals, potential, dynamics or the future of the economy.
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He further requested the investors to have trust in Turkey’s strength and potential. He said that the current volatility will soon be over with. He also urged the netizens of the country who keep foreign currencies and gold to reveal them in the market as financial instruments.
Netizens Invest Heavily In Gold And Foreign Currencies
With the depleting economy, the Turkey netizens are investing in dollars and gold to protect their purchasing power against inflation. As per the sources, Agbal had reportedly tried to restore stability buy increasing the interest rates by 875 basis points in the past five months. This has brought the policy rate to a 19% benchmark.
However, Erdogan has always claimed that he stands against high-interest rates and high inflation. Reports suggest that since March 19, the Turkey currency Iira has lost about 10% of its value against the US dollars. As of Wednesday, Iira 729 is equated to $1.
The firing of Abgal came after the Central Bank announced that they would be introducing a hike of 200 basis points in the policy rate last week. This was introduced to fight the double-digit inflation which was at 15.6 percent.
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Recently, Erdogan announced a new economic plan and promised to prioritize the fight against consumer prices and bring the inflation rates back to a single digit. The government wants to bring the annual inflation to 7 percent by the end of 2022 ahead of the presidential and general elections 2023.
