Whatever will be, will be…

I mentioned so many times in my reports that Central Bank’s moves were designed to slow down USD/TRY’s ascent, not to make it fall down. While saying that, I never once underestimated Central Bank’s role in managing the monetary policy. On the contrary, I have always supported CBRT’s weariless efforts, emphasizing that no Central Bank in the world could carry out a “national monetary policy” all alone.

There’s a Turkish saying which can be roughly translated as, “Whatever will be, will be”. If we take a look back in time, there are many useful lessons we can learn from the past FX experiences. I clearly remember that while I was serving as an executive at the Turkish Football Federation, the sole regulatory and independent authority for football in Turkey, I used to warn people not to exchange foreign currency income obtained from FIFA, UEFA, broadcasting institutions and sponsors with the lira immediately. However, they were insistent on exchanging the income with Turkish lira so as to put it out at interest with 5-6% rate. I, on the hand, kept on reminding them they should have exchange the money when needed.

Interest rates had been risen by around 30% from the first day and the final day of my office. In just two and a half years… I am talking about a rate that TRY interest rates of the time could have never attained. I clearly remember that one day, while vacationing abroad, I got a phone call from one of the Board members. He had asked me, “I wonder if we could make more money if we exchanged it with lira and put it out at interest”. He finally stopped insisting when I told him the numbers so he can make a detailed analysis.

Back then, I had anticipated that Dollar/TL could have climb from 1,71 to 3,00, and made all the necessary warnings to companies that they could face serious deterioration in their balance sheets in the event of a swift currency rise. I had even insisted that a number of briefings should have been held to prevent the football clubs from being stuck in a difficult situation. My warnings, however, had been ignored amidst the busy agenda of the time.

Again we are facing the same issue. This times USD/TRY is trying to hit 4.00 and above. Not only companies, but also football clubs paying transfer fees in euro might soon incur huge losses. As a matter of fact, they already did. I, on the other hand, have a clean conscience about this as I had delivered all my warnings during the summer where exchange rates had been rather calm.

But of course, I don’t entirely feel at ease. Being proved right is not so pleasing all the time.