The Turkish president is facing several questions and criticisms against his announcement of a new monetary policy. The TUSIAD business group has urged Erdogan to go back to the rules of economic science.
Erdogan has also been asked to completely write off the new policy that is based on low rates.
This comes after the Lira touched a new low mark against the US Dollar, with experts predicting an increase in inflation.
Here’s What Happened
The Lira went lower than 17 against the US dollar in the international market. As experts predict a huge rise in the inflation rate, Erdogan has been asked to abandon his new policies.
The Turkish currency has lost 55% of its value in 2021. The major impact was witnessed in the recent 30 days when the Lira lost 37% of its market value. This figure is included in the total loss of 55%.
Experts and the TUSIAD business group have lined up a series of questions that ultimately urge him to let go of the new policies.
The TUSIAD business group claims that it has earlier warned Erdogan of the negative impacts that the new policies may have. They were meant to boost exports but have ended up damaging them a lot more than expected.
New monetary policies have created an environment of instability and distrust among the players, further claims the TUSIAD business group.
The goal was to resolve the existing issues; however, it appears to be impossible with the new economic policies. The policies have harmed not just the businesses but also the citizens.
Economists have called it a reckless move. The Central Bank was reportedly forced to cut rates by 500 basis points by Erdogan. The move was in place from September 2021.
Devlet Bahceli, the leader of MHP, has come out in support of Erdogan. He has dismissed every opposing statement by saying that the new policies would succeed despite the economic harm that they have done till now.
The Measure And Its Impact
Erdogan raised the minimum wage by 50%. This was done to mitigate any increase in the inflation level. He announced the measure amid all the opposition.
The Turkish president aims to boost consumer price inflation by 3.5% to 10% points through this measure.
It too has been criticized, citing that the increase was insufficient to meet regular expenses like gas and food. The criticism was stated by Zeki Erdogan, a bakery worker.