BY ALATTIN AKTAS
It’s necessary to draw this analogy once again: “Savings are like cats; they don’t do well when they’re cornered, they attack if they can’t run.”
The Treasury and Finance Minister Nureddin Nebati almost proudly said they made the policy rate insignificant. However, in reality, other interest rates – the deposit interest rate, for instance – seemed to have been made insignificant.
The deposit interest rate is like a cat; be careful!
Banks have reduced deposit interest rates below 17%. An interest rate of between 16-17% is given for deposit accounts. Moreover, withholding will be cut from this, and the net deposit interest rate will even fall below 16%.
Indeed, the interest rate shouldn’t be compared with the inflation of the previous period. Let’s look at the future…
You would think that inflation would remain at 13-14% for the next year with an interest rate of over 15% for deposit accounts.
Let’s make a simple calculation for inflation…
Let’s assume that the monthly price hikes as of March are at the same level as 2021 and that the monthly hikes fall to 1% in November and December. The year-end surge declines to 34% even in this case.
We give a net interest rate of around 15.5% today.
The year-end inflation seems set to reach 34% in the best possible scenario. Let’s say it continues to decrease in the first months of 2023 and falls to 25%.
There is still a 10-point difference. Here is what people were told, albeit indirectly:
“Why are you saving? Go and spend it… Look, we’ll give you an interest rate below inflation. You’ll lose, the decision is yours…”
Let’s make another calculation. Let’s say a fantastic new program is announced, it performs a miracle and, as a result, prices don’t increase until the end of the year, including this month.
In that case, the annual inflation will reach 16.45% in 2022!
Even the ‘annual’ interest rate that is given now doesn’t match the inflation that has emerged ‘in two months’.
We are justified in saying that we are pushing our luck with the policy rate. People are being punished for continuing to hold deposit accounts; they will soon experience extreme difficulty in other fields.
