The Turkish currency crisis is worsening…and the opposition is “Erdogan’s reason”

The Turkish opposition parties blamed President Recep Tayyip Erdogan for the recent deterioration of the Turkish lira against foreign currencies, accusing him of causing the currency crisis after his dismissal of a number of central bank officials at dawn last Thursday, which led to further losses in the value of the Turkish lira, which It has already lost 19% of its value against the US dollar since the beginning of this year alone.

In this regard, Gürsel Tekin, a deputy in the Turkish parliament for the Republican People’s Party, which is the main opposition party in the country, stressed that “the officials who were dismissed by Erdogan were not the reason for the exacerbation of the currency crisis, and therefore their dismissal will not achieve stability in the exchange rate of the lira against foreign currencies.”

He also told Al-Arabiya.net: “In order to solve the currency problem, drastic measures must be taken, but the Turkish president wants to control the interest rate on the one hand, and on the other hand he wants to control the exchange rate of the lira, and therefore we are witnessing a further deterioration in its value.” “.

Erdogan’s policy

He also stressed that “the reasons for the decline in the value of the Turkish lira are multiple, and most of them are related to government policies since Erdogan transformed the country’s system of government from a parliamentary system to a presidential one. International trust in the Turkish Central Bank, which led to the deterioration of the value of the national currency.
He continued, considering that “Erdogan ignores the necessity of the independence of the central bank and wants to lead the country alone, and therefore the currency crisis continues, especially with the economic repercussions imposed by the Corona pandemic, and that is why the problem cannot be resolved without effective democracy and massive reforms in the administration and state institutions, in addition to respecting the sovereignty of law and present sound economic policies, which is what we are working on in the Republican People’s Party.”

Turkish lira

Tighten the grip on the bank

For his part, Ghassan Ibrahim, a political analyst specializing in Turkish affairs, said, “The reason for the loss of the Turkish lira is due to Erdogan’s policy of reducing the interest rate and as long as the interest rate is low, the lira will continue to lose its value, but it has the ability to rise again and I believe that its price will stabilize with Nine pounds to one dollar.

He also told Al-Arabiya.net that, “Erdogan aims, through the dismissal of officials in the Central Bank, especially the department specialized in managing monetary policy, to tighten his control over the bank, so that decisions related to setting the interest rate come directly from the Republican Palace instead of being issued by experts. And economic technocrats, and this will lead to a further decrease in the interest rate, and it will be reflected in the decrease in the exchange rate of the lira.”

Erdogan supporters’ curse

He continued: “These dismissals will not have a political dimension on the external level, but they will put Erdogan in an internal confrontation with his supporters, the lower the value of the lira will increase inflation and the rise of the citizen’s main consumer goods, while it will ease the economic burdens on companies close to the Turkish president, and therefore it seems that he is thinking The interests of those companies that work with banks’ money after obtaining financial loans, especially since the high interest rate increases the burdens of these companies, they want to export. The loss of the lira in its value makes Turkish goods relatively competitive in foreign markets.”

Turkish Central Bank

And the Official Gazette announced at dawn on Thursday that the Turkish President dismissed three members of the Monetary Policy Committee of the Central Bank and appointed two new members in their place, which plunged the lira to new record levels, to record 9.16 against the US dollar.

The isolated ones are the Deputy Governor of the Central Bank, Semih Toman and Ugur Namek, and a member of the Monetary Policy Committee, Abdullah Yavas, according to what was mentioned in the Official Gazette.

Erdogan appointed Taha Cakmak as deputy governor of the Central Bank, and Yusuf Tuna as a member of the Monetary Policy Committee.
Following the announcement, the Turkish lira fell to a new record low of 9.1900 against the dollar, taking its losses since the beginning of the year to 19% due to monetary policy concerns.

 
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