DISCLOSURE: Sourced from Russian government funded media
TURKEY’S LIRA PLUNGE LEADS TO RARE ANTI-GOVERNMENT PROTESTS
[ Editor’s Note: Erdogan’s high wire act of spending like a drunken sailor during a bad economy is bringing on the inevitable, a crash in the lira, 20% over the last week, 15% of that just on last Tuesday. At times like this, the coup plotters make extra coffee to stay up late preparing for what the dawn might bring.
Those on the sidelines have to gamble on picking a side or just keeping their heads down to save them. Overseas trips are also fashionable during these times. The last failed coup, an American one according to some sources, brought on thousands of arrests and serious jail terms for both plotters and those caught following orders from above.
As panic sets in, Erdogan has pushed the banks to cut interest rates despite inflation at 20% and on the way to 30%, and possibly 50% if the lira slide continues.
Currency reserves have gone from $30 billion positive to $30 billion negative, kind of a hint that some serious looting has been going on so someone can live happily ever after if Turkey implodes. Azerbaijan might inherit Mr. Erdogan.
The credit rating agency, S&P Global, is estimating that over the next 12 months close to $170 billion of mainly dollar-denominated foreign currency debt needs to be refinanced.
That is almost 23% of GDP and far more than reserves could cover. In the face of this gloomy situation, Erdogan puts on the good face, “We know very well what we are doing with this policy, why we are doing it, which risks we face and what we will obtain at the end”.
He of course is bluffing. The big players who like to put countries down the toilet and then buy them at rock bottom prices wait patiently for these opportunities every five years or so. They are Super-Santa Claus events for those with big stockings… Jim W. Dean ]
First published … November 25, 2021
Turkey is evidently slipping into a crisis, as the lira hit record lows on November 24th. The currency dawned on exactly 13 lira against the US dollar, after President Recep Tayyip Erdogan defended recent sharp rate cuts. Turkish currency crashed by eight percent on November 23rd alone.
Lower rates will help spur economic growth and create jobs, Erdogan said, as people took to the streets to protest the dire situation. Hundreds of people took to the streets in Turkey, calling on Erdogan’s government to resign.
Videos on social media showed police forces intervening and blocking the path of protesters gathered in Istanbul and the capital Ankara.
Erdogan has applied pressure on the central bank to pivot to an aggressive easing cycle that aims, he says, to boost exports, investment and jobs.
This happens against a backdrop of inflation soaring to near 20% and the currency depreciation accelerating, eating deeply into Turks’ earnings. Many economists called the rate cuts reckless while opposition politicians appealed for immediate elections.
After a meeting between Erdogan and central bank Governor Şahap Kavcıoğlu, the bank issued a statement saying the selloff was “unrealistic and completely detached” from economic fundamentals.
It doesn’t help the situation that Erdogan has replaced three central bank governors in the past two years, undermining investor confidence.
The current protests and calls for resignation could have potentially been avoided if Ankara hadn’t missed its window to focus people’s attention on a military operation in northeastern Syria.
Forces were deployed, positions were reinforced, attempts to escalate the situation were carried out. It all led to nothing, as both the Syrian Arab Army (SAA) and its allies, and primarily Russia carried out the necessary steps to largely deter any large-scale hostilities.
As a result, Turkey’s population is now focused on what is happening internally, and it is expected to blindly follow Erdogan’s plans that seem to make no sense, as a massive share of people’s savings are being eaten through.
It is expected that protests will continue in the following days, and it is likely that clashes with police will increase in severity as well as in frequency. Few were detained in the first two days, but protests were quite small-scale.
The lira continues to plunge, and promises to lead to an even the harsher crisis. The signals for the catastrophe were detectable for months, but little was done to avoid the crash.