Economist Prof. Dr. Duran Bülbül warns small investors: 'The stock market is not a safe haven'

The Central Bank of the Republic of Türkiye (TCMB) announced its interest rate decision following the November Monetary Policy Committee (PPK) meeting. The committee kept the policy interest rate unchanged at 50 percent for the 7th consecutive time.

Following the announced decision, 12punto contributor economist Prof. Dr. Duran Bülbül evaluated the interest rate decision and issued warnings to small investors.

"POLICY RATE IS 47 PERCENT IN THE MARKET"

Stating that the policy rate has been on a steady course for a long time, Prof. Dr. Bülbül said, "The policy rate has been hovering at a fixed 50 percent for a long time. In fact, if this could have been done when the process was initially at the 10s level, we wouldn't have reached such interest rates, and it would have remained at the 35 percent level. However, interest rates can be lowered by suppressing foreign currency and increasing production. Although the Central Bank has kept the policy rate at 50 percent in this policy, the policy rate is actually at the 45 and 47 percent level in the market right now; this is what the market has determined. The market sells the money it collects at 45-47 percent to the treasury with a 12-13 point margin. The functionality of this interest rate policy has now ended."

"FOREIGN CURRENCY IS ON A KNIFE-EDGE BALANCE"

Expressing that there is a difference between the value in the market and the announced value, Prof. Dr. Bülbül stated, "The price set by exporters for the dollar and foreign currency is around 42. This means we see that the market has taken precautions in this regard and has created its own exchange rate. For this reason, foreign currency may continue to rise slowly in this way for a while without making rapid increases. This is a knife-edge balance. There is a market that is affected by minor troubles. The biggest reason for this is that ensuring stability in the market is a matter of political trust. The market does not give confidence to the producer, the public, the exporter, or the investor with its politics, government, and opposition."

"GOLD IS THE INVESTOR'S SAFE HAVEN"

Pointing to gold as a safe haven for investors, Prof. Dr. Bülbül said, "Recently, gold has been experiencing declines and rises due to the international conjuncture. The safest investment method in the whole world is gold. When we look at it in the long term, gold is the safest investment, a safe haven. There is a serious 'street jargon' being used in the market that gold will fall, and people are being encouraged to shift their gold into foreign currency and interest, which are policies that will once again put small investors in trouble. The stock market is not a haven for small investors to take refuge in. Recently, small investors have lost money in the stock market. Therefore, gold will maintain its relevance as a safe haven," he concluded.