The decision of the Central Bank turned out to be as expected. It doesn’t matter if it’s 100 or 150 basis point. In a meeting I attended with Professor Mahfi Eğilmez yesterday, we agreed on the following.
“Waiting for irrational decisions has become a regular part of our lives.”
As a matter of fact, the markets are now indifferent to these developments., If the CBRT had kept the interest rate stable, we might have experienced volatility. Really, I’m not joking. As Fernando Pessoa said in “The Book of Disquiet”, too much suffering makes you apathetic. The fact that there was not much movement in the Foreign Exchange Market, and the slight reaction of the BIST are both proof of their indifference.
I’ll analyse this issue in more detail tomorrow. Has cutting rates helped Turkish economy in any way? If hasn’t, why? What will happen next? I will try to answer these questions in tomorrow’s column in Türkiye Newspaper.
Meanwhile, warnings of “perfect storm of crises” and “long and deep recession” are coming in from all over the world. Well, these warnings have been out there since the beginning of 2019. I don’t think anyone predicted the breakout of a pandemic. We shall see if it’s going to be as bad as they say.