The dollar, which exceeded 16 Turkish Liras (TL) in the morning, exceeded 17 TL in the afternoon. The Central Bank's intervention on the dollar for the 5th time in 17 days did not work out either.
Stating that the policy of stabilizing by creating a crisis in the national currency in the history of economics is in Turkey for the first time, Prof. Dr. Esfender Korkmaz said, “The TL has become the world's most and fastest depreciating currency against the dollar. It has lost more value than the Argentine Peso, which is in crisis."
Turkey wakes up every day with a new record in foreign exchange. The dollar rate, which rose to 16 TL last morning, climbed to 17 TL. This fluctuation in the exchange rate has had quite negative effects on every sector. While it is said that many companies will stop production or make very little production because they cannot provide raw materials, a decrease in drug production is expected especially due to the fact that the Ministry of Health has fixed the dollar rate as 4.70 TL.
“TL IS THE WORLD'S MOST AND FASTEST LOSS OF VALUE MONEY”
Stating that the policy of stabilization by creating a crisis in the national currency in the history of economics is in Turkey for the first time, Prof. Dr. Esfender Korkmaz said, “The TL has become the world's most and fastest depreciating currency against the dollar. It has lost more value than the Argentine Peso, which is in crisis. In the same period, prices as Consumer Price Index (TÜFE) increased 1,53 times. The first effect of the high exchange rate is the increase in exports and the decrease in imports. But the decrease in imports is due to the reduction of investment and consumption goods imports.”
“FIRMS WILL BECOME HARD UP FOR MONEY”
“As exports increased, the rate of total imported inputs also increased. Imported input financing also became more difficult. The bankruptcy risk premium in foreign bonds rose to 517 basis points. Firms can find more expensive foreign debt. Since the exchange rate increase is higher than inflation, the producers are afraid that they will not be able to put the same goods in their warehouses. Under these conditions, the private sector cuts its production or some companies fall into trouble. On the other hand, the Ministry of Health accepts the dollar rate as 4,70 TL in pharmaceutical factories. Pharmaceutical Factories, fearing the threat of closure of the Ministry they do not stop production, but reduce the production level," Korkmaz added.
“THE PRIVATE SECTOR'S FOREIGN CREDIT DEBT INCREASED BY 315,6 BILLION TL”
Referring to the problems in domestic production, Korkmaz said, “The effect of the decrease in domestic production and imports has already begun to be seen in some goods. For example, companies have difficulties in finding sugar. There is a shortage of sugar due to insufficient domestic production. Publishing houses cannot find paper, cannot print books. No matter how we look at it, the first result will be the effect of the worthless TL on the private sector in the form of a decrease in production. Latter; the private sector will also have difficulties in rolling over its foreign debts. In foreign currency debts, debts to be paid within one year are important. The short-term external debt of the private sector, which is due and has to be paid within one year, is 42,2 billion dollars. The dollar rate, which was 7,72 TL in December last year, is now based on 17 TL. So there is a 9,28 TL difference between them. Foreign loan debt of the private sector increased by 391,5 billion TL in one year. Since it is impossible for TL revenue to increase at the same rate, many firms could get into trouble."
“STATE OF AFFAIRS NOT GOOD”
Stating that chaos is fueled in this process, “from now on, inflation will continue to increase, there will be narrowing in production and a decrease in growth. Bankruptcies and unemployment rise. The risk of default in Turkey's external debt increases even more. The government, which expects the crisis to be resolved in six months, is not aware that the economy will not be left in the middle in six months. The situation is not good and there are other scenarios at work that we do not understand," Esfender Korkmaz added.