Turkey: why is the lira in freefall?

The Turkish lira has plunged to its lowest level ever. The currency has lost 40 percent of its value in 2021 alone, and as much as three-quarters in the last five years. President Erdoğan is nonetheless sticking to his policy of lowering the key interest rate, citing the fthe Koran, which forbids the charging of interest. Commentators are concerned about the impact of the crisis.

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Habertürk (TR) /

Turks only trust the dollar

Erdoğan should look at the behaviour of his citizens before blaming foreign enemies for the lira's decline, Habertürk says:

“The Turks no longer trust the country's economic management, so they are investing their money in dollars. The banks have deposits totalling 143.7 billion dollars belonging to private individuals. Companies, by comparison, have 91.5 billion dollars in the banks. ... Since the beginning of the year, this amount has remained pretty constant apart from a small increase. The people have invested in dollars and are waiting. When they get money, they buy dollars. You see, there are no foreign enemies. The dollars all belong to our citizens.”

Independent Türkçe (TR) /

A dreadful period lies ahead

The poor in particular are suffering from the currency's loss in value, and their answer will be a rebellion, journalist Hakan Gülseven predicts on Independent Türkçe:

“The last little bit of money the poor people had will go to international moneylenders, imperialist financial capital, foreign multinationals, pro-government contractors and, of course, the cumbersome government bureaucracy and those who profit from it. ... The people's tolerance has almost reached its limit, and the government cannot suppress their reaction without resorting to dictatorial means. Let me be clear: get ready for a dreadful period economically, in health terms and socially!”

Ethnos (GR) /

Erdoğan obsessed with low interest rates

Antonis Chatzikyriakou, a lecturer in Turkish history at Athens' Panteion University, explains in Ethnos what guides Turkey's monetary policy:

“The reason for this crisis is Erdoğan's desire to keep interest rates as low as possible. ... Why is he so obsessed with the low interest rate policy? In his rhetoric, the Turkish president invokes Islamic teachings, in particular the prohibition of usury. There are good ideological and political reasons for this: by trying to rally the right-wing and far-right around the schema of the 'Turkish-Islamic synthesis,' he invokes Islamic ethics on the one hand and how Turkey differs from the West and Europe on the other.”

T24 (TR) /

Koran economy ruining Turkey

Erdoğan's priorities don't exactly point to economic savviness, complains T24, T24 observes:

“Such a view is pre-medieval. It has nothing to do with economic science and management, it slows down production in all areas and it is turning a country of 85 million people into a wreck. ... It is a bigoted ideological approach that has no validity whatsoever and is not applied anywhere. Erdoğan believes that he can solve the economic problems with this Islamic perspective. However, the reality and current developments confirm the opposite. ... The country is heading towards ruin step by step.”

Star (TR) /

We will win this war

The pro-government daily Star, on the other hand, blames political opponents and their attacks on the economy:

“Under Erdoğan's lead, Turkey has become politically and militarily stronger and will demonstrate its customary resolve against these economic attacks. ... Turkey is waging an economic war of independence. The 'political alliance' that first appeared in the attempted coup of 2013, when the Gezi Park protesters hung posters of Atatürk and [Kurdish leader] Öcalan side by side on the police vans they set on fire, used terrorism in the past. Today it is using the economy.”

Rzeczpospolita (PL) /

Poland must learn from Turkey's mistakes

In Rzeczpospolita, commentator Krzysztof Adam Kowalczyk warns of a similar scenario in Poland:

“The problems have existed since 2018, when the Turkish lira's exchange rate crashed, drowning companies in foreign currency debt and triggering a recession. The chaos is exacerbated by the personnel merry-go-round among central bank governors and their subordination to the president, who has just pushed through an interest rate cut despite an inflation rate of 20 percent. ... I'm writing about this because the złoty has fallen by as much as six percent against the major currencies in November and fears of the Turkish scenario being repeated here are growing. ... It is the Turkish central bank's dependence on politics that has become a curse for the country. And this should be a lesson to us too.”