Foreign exchange (FX) rates jumped again following President Recep Tayyip Erdogan’s statements about the interest rate and FX rates yesterday. Speaking in a televised interview with the national public broadcaster, TRT, Erdogan restated his unorthodox view that interest rates cause inflation. He said Turkey is lowering interest rates at the moment and will hopefully see a decline in inflation as well. USD/TRY broke another record, skyrocketing to 13.96 following Erdogan’s statements, but then settled at 13.60.
Talking about FX rates, Erdogan also said Turkey is facing FX rate-interest rate speculation. “We are no longer posting current account deficit and financing this deficit with external debt, but we are moving towards an economy that gains foreign currency and posts current account surplus,” Erdogan said.
President Erdogan also said that Turkey will see lower interest rates before the elections and defended the idea that both inflation and FX rates will improve with low interest rates. High interest rates, he said, trigger high FX rates.
Work on the minimum wage for 2022 officially begins today. The Minimum Wage Determination Commission, consisting of employers, employees, and government representatives, convenes to determine the minimum wage that will be effective from January 1, 2022. The process directly concerns approximately 7 million employees and indirectly concerns all citizens. The Turkish Confederation of Employers’ Association (TISK) will represent employers, while the Confederation of Turkish Trade Unions (TURK-IS) will represent employees at the meeting hosted by the Ministry of Labor and Social Security.
Turkey was the second-fastest growing economy of all member states of the Organization for Economic Cooperation and Development (OECD) in Q3 2021, according to the international organization. Chile recorded the highest gross domestic product (GDP) growth rate with 17.3%, while Turkey’s economy grew by 7.4% in this period.
DAILY AGENDA
The Istanbul Chamber of Industry (ICI) Turkey Manufacturing Purchasing Managers Index (PMI) increased from 51.2 to 52.0 in November, compared to October.
The Istanbul Chamber of Commerce (ITO) will release retail and wholesale prices in Istanbul for November (12.00 pm).
The Minimum Wage Determination Commission will convene in a meeting chaired by Labor and Social Security Minister Vedat Bilgin (2.00 pm).
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>> Turkey is the Mediterranean’s fastest-growing country in terms of arrivals
The competition between Turkey and Spain as to who can be the Mediterranean country to welcome the most foreign visitors continues with just one month left in the year. Turkey surpassed Spain in July in this competition for the first time in its history. Turkey expects 28 million visitors for 2021, while this figure is estimated to hover around 25 million in Spain. If the number of foreign visitors exceeds 25 million, Turkey will end 2021 as the leader of this competition.
