He added, “Because of Erdogan’s interference in the policies of the Turkish Central Bank, the people began to realize that the Central Bank had completely lost its independence, and this in turn created a perception that the intervention in the bank’s policies would lead to an increase in the foreign exchange rate more than it is.”
The Turkish expert noted that, “This situation does not increase the savings trends that the government wants, as everyone tends to buy foreign currency, including the dollar, because of its rise against the Turkish lira.”He continued, “Escape from the Turkish currency is accelerating and the Turkish people are losing confidence in it and moving towards dealing with foreign currency, and capital has begun to flee from Turkey, and its owners are converting their money into dollars.”
The loss of the Turkish lira in its value against the foreign currency, in turn, leads to an increase in inflation rates in the country, and the rise in the exchange rate of the dollar has resulted in an increase in the prices of all consumer items, including food, and a decrease in purchasing power, according to the Turkish expert.
On the impact of the high foreign exchange rate on the real estate sector, the Turkish expert said that he recently noticed an increase in real estate investment, explaining that people accept it as an alternative to lands and real estate units with the rise in the dollar exchange rate.
According to Jin, the recovery of the Turkish lira under the current circumstances will be difficult, saying that “people must be given guarantees to trust the national currency, or capital will continue to flee out of Turkey at a tremendous speed.”
For his part, Turkish economist Arda Tunga said that “expectations to cut the interest rate by the Turkish Central Bank next Thursday, led to an increase in the foreign exchange rate against the Turkish lira and a decline in the past three days.”
Tonga told Sputnik, “The strong expectations of a rate cut and the possibility of higher inflation rates and the consequent loss of the Turkish lira’s value, led to an escape from the Turkish lira and a move to foreign currency, and this in turn caused the foreign exchange rate to rise.”
The Turkish expert said that “the Turkish government is about to make a huge mistake by lowering the interest rate, which in turn leads to high inflation rates at a time when the world is heading to raise it.”
Tonga noted that “the personal income of Turkish citizens has decreased continuously during the past seven years due to the policies practiced by the Central Bank, which negatively affect the livelihood of individuals. Turkey depends in production on imports, as it cannot produce and export products without importing raw materials from abroad.”
With regard to the impact of the high currency exchange rate on the real estate sector, he said, “The loan mechanism set by the government last year and the creation of the possibility of obtaining a housing loan at a low interest rate, prompted those who have money to buy apartments or change their apartments, and the increasing demand for apartments has led to The rise in prices and rent, which negatively affected the citizens of middle and low incomes.
Tonga pointed to the recent disruption of the supply chain, explaining: “There is a problem in the supply of goods and raw materials all over the world, as companies seek to store raw materials in order to be able to continue production, and the problem of supplying goods and raw materials and increasing demand for them, caused a boom in the sector. This in turn has led to an increase in the prices of transport, fuel and raw materials.”
He added, “The Turkish government is reducing interest rates while developed countries tend to raise them in order to protect themselves from inflation rates, despite the knowledge (the Turkish government) that this will lead to a rise in the foreign exchange rate and inflation rates.”
And he added, “Therefore, we are exposed to price increases due to the high prices of raw materials globally on the one hand, and the high exchange rate of the dollar against the Turkish lira on the other.”
The Turkish expert expected an increasing rise in the prices of consumer materials and fuel in the country in the coming period due to Turkey’s import of energy from abroad.
The Turkish Lira continues to fall to an all-time historical low due to the Turkish President’s policies towards the Central Bank. A few days ago, Turkish President Recep Tayyip Erdogan dismissed 3 members of the Monetary Policy Committee of the Central Bank.
Last month, the central bank cut the interest rate to 18 percent from 19 percent, in a decision that deviated from market expectations, despite the rise in annual inflation to 19.85 percent last month.
During Tuesday’s trading, the Turkish lira lost more value, recording 9.31 against the dollar, while it reached 10.83 against the European euro.
These were the details of the news A “warning” of a “deeper” collapse of the Turkish lira. for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.
It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.
