Erdoğan claims foreign conspiracy over the Central Bank reserves he burns and sends investors running

Recep Tayyip Erdoğan Turkey

The statement that he was protecting the Turkish economy from “attacks by foreign financial instruments that could disrupt the financial system” was made by Recep Tayyip Erdoğan when speaking to the country’s Parliament yesterday.

This of course did not impress economists, New Money reported.

“he swelling inflation is not in line with the realities of our country,” he said, according to Reuters.

He promised that the measures recently announced by his government to support the Turkish lira  would soon drop the unfair price increases.

Erdoğan has vowed to cut inflation, which hit a record 36% in December, as the Turkish Central Bank prepares for another meeting next week on interest rates.

However, the comments made by economists were rather derogatory.

READ MORE: Turkish opposition leader: Basic salary in Greece is almost 3x higher than Turkey, who is impoverished? 

According to CNBC, Bluebay Asset Management analyst Timothy Ash called Erdoğan’s statements “More complete and utter rubbish,” stressing that there is no conspiracy from abroad.

““Foreign institutional investors don’t want to invest in Turkey because of the absolutely crazy monetary policy settings imposed by Erdogan,” he wrote. “There is NO foreign plot.”

“Even the Turkish pound does not believe in Erdogan”

Meanwhile, John Hopkins University economist, Professor Steve Hanke, wrote on Twitter:  “If [Recep Tayyip Erdoğan] wants to save the Turkish lira, and maybe his own skin, he should adopt a USD-based currency board. That would make the lira as good as the USD.”

He also said that Turkey was “spontaneously dollarizing”, while publishing an article in the Israeli newspaper Haaretz, entitled “Even the Turkish lira stopped believing President Erdogan”.

In fact, in another post, he describes Erdoğan’s economic policy as absurd and points out that using special measurements, he estimates that inflation in Turkey today at “97.17%, almost three times higher the BODUS December 2021 official rate from [Recep Tayyip Erdoğan].”

A few days ago, Erdoğan announced that in an effort to strengthen the Turkish lira, exporters would have to convert 25% of their revenue into local currency if payments are made in US dollars, euros or pound sterling.

According to CNBC, Erdoğan’s critics consider this plan unsustainable and that in fact it is a hidden increase in interest rates.

At the same time, the reserves of the Central Bank of Turkey are declining, with gross reserves falling in the first week of 2022 by $1.6 billion to $109.4 billion, as according to Goldman Sachs, the foreign exchange reserves were reduced at $71 billion.

READ MORE: Turmoil in Turkey: Erdogan targets people’s jewellery to deal with financial crisis.

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