While the election economy that has been implemented in the last few months, namely the irresponsible opening of the "money taps", exacerbates the existing problems, even the 14-day period between the first round and the second round gives frightening ideas about what happened after the election.
While the CDS risk premium, which was 494 basis points before the first round of the general elections, reached 704 points, reaching its highest level since October 2022, the dollar exchange rate in particular signals new records despite their "pressure".
Considering what has happened, it is understood that even if the election is over, the issue of livelihood will become more difficult for the citizens.
Although Turkey has been locked in the election agenda for the last few months, it continues to empty the citizens' wallets by increasing the effect of bad economy and high cost of living, which is the real agenda. Inflation remains high, albeit slightly receding due to the base effect.
Even access to basic foodstuffs strains budgets due to the wrong economic policies of the government.
While going to the first round of the elections, the government's opening the "money taps" at the expense of exploding the budget deficit creates a serious burden on the Treasury.
Uncertainty with the presidential elections going to the second round also multiplies the bill.
Turkey's CDS risk premium increased from 494 to 704. This situation will increase the possibility of non-payment of the foreign debt, while the foreign investments will decrease, causing the economic indicators to deteriorate.
DEVALUATION EXPECTATION DOMINATES TURKISH LIRA
While there is a very short time left for the elections, the developments in the economy in the 14-day period before the second round are considered as "fragments of what will happen after the elections" in the economy, which has been turned into a wreck by wrong economic policies.
While the dollar rate, in which billions of dollars of reserves of the Central Bank were sold for the sake of suppression, almost awaits after the election, the markets are trying to adjust themselves for a possible exchange rate shock. This situation increases the expectation of historical record in exchange rates.
There is also a danger that a devaluation of the TL against foreign currencies will cause high price hikes in all products from needle to thread, and thus high inflation again.
CITIZENS' REACTION MADE BANKS TO TAKE STEP BACK
The depreciation of TL due to the economic crisis and the citizens started to use their money in items such as foreign currency and gold.
Citizens, who took cash advances by taking advantage of the cash advance feature of the banks, started to use this cash as capital by investing in items such as foreign currency and gold, which caused the Central Bank to decide to cut bank loans.
Millions of citizens, who were sentenced to banks due to the wrong policies implemented by the government in the economy, reacted to the decision taken.
The Central Bank, which saw the reaction of the citizens who spent the end of the month with their credit cards, had to take a step back by announcing that the decision was cancelled.
EXCHANGE RATES BREAK RECORD
While the elections are only 5 days away, the developments in the economy continue to be interpreted as the results of the crisis.
According to the results of the first round, while the perception that the current government will continue dominates the markets, after the announcement that the economic policies implemented before the election will be continued, the exchange rates broke a historical record.
With the exchange rates exceeding 20 liras, it is talked about that there will be more hikes in many products as well as fuel and technology products. On the other hand, if the current power continues; The emphasis that exchange rates may increase further continues to be made frequently by economists.