BY ALATTIN AKTAS
The brake pedal of the economy was dismantled in September last year. In August, inflation was not even 20%, the USD/TRY rate was below 8.50, and the interest rate was 19%. All other data started to deteriorate with the interest rate cut started in September. The exchange rate data points to the monthly average, in reality 18 TL was exceeded in the middle of December. Foreign exchange-protected deposits were created to limit the out-of-control increase in FX rates. However, the level of the exchange rate in the economy is a tool, not a goal. Moreover, what is the outcome of an (apparently) falling exchange rate? The goal of the economy is to enable people to live in prosperity. The most basic way is through low inflation. But there is no brake, and in an economy without brakes, inflation accelerates day by day. Although the rate in March remained relatively low somehow strangely, the annual level is above 60% and heading towards 80%. If that mistake had not been made in September, there would have been no need for FX-protected deposits, which have mortgaged the future of the Turkish economy, inflation would not have climbed to these levels, and would gasoline and diesel oil would not be so expensive. Besides, if the interest rate cut is a good practice and for the benefit of the country, why has the interest rate been fixed for four months? Actually, isn’t that a confession itself?
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