Credit rating upgraded: It was odd that it was that low anyway.

 
The IMF is supporting Turkey’s current economic programme hence Turkey’s long-term sovereign rating moves one notch higher, which goes to clearly show that global organisations are not interested in people’s welfare.
 
The IMF, which had supported a crawling peg in Turkey in 2000, dragged the country into a major financial crisis. The solution that the IMF had suggested first brought a slight economic recovery but then was then followed by a massive collapse. The architect of Turkey’s 2001 financial crisis, Stanley Fischer had expressed the fallacy of this suggestion in an article he would write years later. In the following years, Fischer would serve as the Governor of the Bank of Israel from 2005 to 2013 then take the position of Vice Chair at the Federal Reserve from 2014 to 2017. Let me remind you that the government changed in Turkey after the implementation of this prescription.
 
And today, these organisations are applauding the policy that caused Turkey to become more expensive than Europe. Yes, our credit rating is increasing yet it still remains several notches below investment grade. In the meantime, the IMF is doing its best to ensure that Turkish government does not abandon this economic policy.
 
Last week, I attended a meeting of international investors. The conversations I had with executives from Saudi Arabia, the Czech Republic and India, which dominate the global banking system today, have only confirmed my opinions further.
 
This economic prescription will have political implications
 
First of all, they think that Turkey’s economic team does not have an exact idea as to why inflation keep rising in the country. That is why they say they will not be fooled by the fact that the inflation rate will go down towards the autumn due to the base effect. Emphasising that Turkey’s current monetary and exchange rate policy would lead to greater instability, they are warning that the Turkish Government is making the same mistakes as Egypt and Argentina. Therefore, they say that they can invest in TRY-denominated assets but only for the short term. And even when doing so, they say they will have their hearts in their mouths.
 
Also reminding that Turkey’s FX reserves are even below the critical level and that it is not possible to get a loan and do business with such a prescription, they state that it is very difficult for people to get a loan from a bank and try to keep their business going where such an economic policy is in place. However foreign companies can make a lot of profit by injecting capital into their subsidiaries in Turkey.
As far as inflation goes, a participant from the Czech Republic said, "We thought Prague was expensive. Istanbul has the highest inflation rate in Europe." Also, they could not quite understand why EU-made goods in shopping malls are 30-40% more expensive than they are in the EU. Having seen the CPI which was came in at around 70%, they realised that Turkey is even more expensive than Japan. Obviously, it would be unfair to blame the previous economic team alone for the soaring inflation. Because the members of the current team, which still sell the FX reserves, impose restrictions on Turkish lira transactions, and are still unwilling to terminate the KKM deposit scheme, are equally responsible as their successors.
 
These people, who were once appointed to great acclaim, are now being criticised by the public. I think May and June inflation rates will heighten tensions even more. But one thing is certain that all of this will have political implications.