As the Week Starts…
The pain and the suffering in the world continue as we keep up with our daily routines. Yet, the life goes on.
Something strange happened about the exchange rates again last night. Last week, TRY to USD exchange rate was 24.04, last night it was 24.14. I don’t know who is trying to do what, but it’s not nice at all.
Inflation rates were released last week. I had said to those who were glad about the slowdown in price increases that “one swallow does not make summer”. Tax increases and rising costs of living are ahead of us. The intervention in the car market loosened the prices. Apparently, the government cracking down on the corrupters is more effective than raising interest rates. I expect the same vigilance for the agriculture and food markets, as well as for the other sectors. The raw material producers that constantly exert pressure on those who produce final goods in Turkey need a harsh warning. These groups ensure that decisions are made in their favor, in all almost areas from trade to tax regime. This country is in dire need of an administration that can say “no” to the demands of these groups.
As for the interest rates: if the government allowed timely hikes, we would not be dealing with such high market interest rates today. Unfortunately, today the CBRT’s hands are tied, struggling with high cost of funds, growth concerns and political pressure. The delayed treatment caused the patient to develop stronger tolerance against the medication.
When we look back, we see that we went through two separate decades. The 2003-2013 period, when all economic parameters used to be very nice and normal, and the period of 2013-2023, when the deterioration started and then rapidly peaked. It is futile to try to find out what we did wrong because there were so many mistakes. What we need to do is to remember what we did right back then and return to basics.
