Turkey: YPOIK meeting with the banks – A cry of agony from the businessmen

Turkish Finance Minister Nuredin Nebati briefed the Turkish Banks Association, the BDDK banking authority and state-owned banks on the new low-interest rate economic model, the union said.

The meeting takes place in the shadow of the slump of the Turkish pound, which on Friday recorded a new record low, exceeding the level of 17 pounds against the dollar, in the wake of the decision of the country’s central bank to reduce interest rates despite the rally. of inflation.

The Turkish currency has lost about 55% of its value this year, with 37% in the last 30 days alone.

At the same time, inflation in the country has already exceeded 20% according to official data, with analysts warning of an even bigger inflation spiral due to Turkish President Recep Tayyip Erdogan’s policy of lowering interest rates despite strong upward pressure.

“Our banks will continue to use their resources to meet the financial needs of households and the real economy, within the mechanism of a free economy that operates with rules,” the banks’ association said in a statement. He also said that the purpose of the meeting was to discuss “healthy and sustainable development”.

Scream of agony from business people

The largest business association in Turkey, meanwhile, has called on the Turkish president to abandon the low interest rate policy that led to the pound’s slump and return to the “rules of economics”.

In a statement issued by TUSIAD, it noted that it had warned the government of the negative impact of the policy of low interest rates and the serious impact on businesses and households, as reported by Reuters.

“As a result of the instability we have been experiencing lately, it is now clear that the objectives of the current economic program, as it is being launched, will not be met,” he said.

At the same time, he stresses that “an environment of mistrust and instability has been created” and warns that there is a risk of “much bigger” problems in the future.

“Even exports were hit, although the expectation was that they would benefit from it,” he added.

Erdogan’s pressure on low interest rates has led the country’s central bank to cut interest rates by a total of 500 basis points since September.