It is alleged that President Erdoğan listened quietly in his meetings with the economy team, and was not satisfied with rate hikes, claims Nuray Babacan, a veteran political affairs correspondent writing for independent news site Gazete Pencere.
It is claimed that the economy team led by czar Mehmet Simsek in return did not like Erdogan’s saying, “Let me talk to my advisors about this,” for some new proposals.
According to the special report of Gazete Pencere journalist (Ms) Nuray Babacan, President Tayyip Erdoğan, who does not like the picture presented at the briefings behind closed doors, feels himself trapped inside and outside. Despite some steps towards orthodox economic management, foreign investors still do not trust Turkey. The president may have been discouraged by briefings that more monetary and fiscal tightening will be needed to attract foreign finacial ivnesgtment.
Babacan made the following statements in his article:
In the previous article, I discussed that the recent developments in the context of “NATO, EU, USA and Sweden” should be read from a different perspective. In order to associate it with the economy, it will be necessary to start with the recent United Arab Emirates and Qatar tours by VP Cevdet Yilmaz and Mehmet Simsek, which did not achieve what is desired, and proceed to the economy briefings that Erdogan held before he left for Vilnius.
Let us first convey that the meetings of Treasury and Finance Minister Mehmet Şimşek and Central Bank Governor Hafize Gaye Erkan to explain and persuade President Tayyip Erdoğan about the new economic order were not so rosy. In the presentation made to the President, information was given about the steps to be taken in the coming period, especially the interest policy.
In the briefings, it was explained that the main target was to reduce real interest rates, and accordingly, additional steps would be taken in order to reduce the risk premium. It was stated that increasing the interest rates will reduce the CDS premiums, which means cheaper and more ample foreign borrowing.
We also learned that in these meetings, where the President usually prefers to listen quietly, he expressed his distaste for the first rate hike, which economists found insufficient at the last MPC meeting. In fact, it is said that he reacted “You’re making me swallow my words”. However, it is stated that the economy team did not fall relent, making the point that the interest rate hike was below expectations and that these increases would continue in a balanced way.
So, the process of convincing the President continues. Let’s add that the new economy team did not like President Erdogan’s statement, “Let me talk to my advisors about this,” for some new proposals. Because it is known that his economic consultants, who have been sidelined for a while, are against both Şimşek and the new policy settings.
For this reason, there will be an interest rate hike at the Monetary Policy Committee meeting to be held this month, but no one expects the policy rate to exceed 20 points (Currently 15%). This figure is significant; because the expected Western capital did not enter Turkey. They are still watching from afar. Investors also see the differences of opinion and economic imbalances that we see. That is why “economic priorities” lie behind Erdogan’s rapid foreign policy maneuvers.
This is the only reason why he suddenly loves EU membership so much, joins arms with the Greek administration, to which he bashed with harsh words in the recent past, pretends that there is no problem with the USA, embraces Sweden’s NATO membership as if he did not make the harsh criticism two days ago, and the festive mood spread in the government’s media: The bankrupt economy.
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