A move from economic management that fuels early election claims! 'The first step of election economics...'

It has been claimed that the economic management team may take steps to reduce the financing pressure on the real sector. The regulations being discussed include lowering the funding interest rate, loosening practices that limit credit usage for SMEs, and allowing the rise in the exchange rate to follow a trajectory closer to inflation.

According to a report by the newspaper Ekonomim, The economic management team, led by Minister of Treasury and Finance Mehmet Şimşek, is expected to make certain adjustments to its tight monetary policy. It is stated that these changes will be aimed at facilitating the real sector's access to financing.

LIMITATIONS ON SME LOANS ON THE AGENDA

According to information conveyed by the real sector and banking circles, changes in economic policies are being evaluated under three different headings.

One of these is reducing the funding interest rate, which is at the 40 percent level, to the 37 percent policy rate. It is stated that if this claim materializes, even if there is no direct change to the Central Bank's policy rate, the interest rates used in the markets could decline.

On the credit side, some limits are also expected to be reconsidered. While loosening the 0.5 percent monthly limit applied to foreign currency loans is among the options, it is also suggested that credit growth restrictions that make it difficult for SMEs to access TL operating loans could be softened.

CLAIMS OF DOLLAR RATE INCREASING IN LINE WITH INFLATION

Another pillar of the claims regarding economic management concerns the exchange rate. It is stated that the current rate of depreciation of the Turkish Lira could be increased and that the dollar exchange rate could be allowed to rise in parallel with the inflation rate.

The potential change in exchange rate policy has become one of the topics highlighted by economists.

Economist Altuğ Özaslan stated that he does not find it appropriate for the rise in the dollar exchange rate to be brought closer to the inflation rate, commenting, "If such a decision is made, I would read it as the first step of election economics."

KÜÇÜKKALE: "WE HAVE EXCEEDED THE OPTIMAL DURATION IN EXCHANGE RATE POLICY"

Prof. Dr. Yakup Küçükkale from Karadeniz Technical University evaluated the discussion of the three proposals brought to the agenda positively.

In his assessment regarding the duration of the exchange rate policy implemented by Turkey, Küçükkale used the expression, "We have exceeded the optimal duration in exchange rate policy. In the literature, the lifespan of these exchange rate regimes is between 1.5 and 2.5 years, but in our case, 3 years have been exceeded."

ELECTION ECONOMICS IS AT THE FOCUS OF THE DEBATE

Potential changes ranging from funding interest rates to credit limitations, and from exchange rate policy to SMEs' access to finance, have brought with them the debate over a transition to election economics.

According to the claims, the economic management team is evaluating steps to ease financing conditions for the real sector while maintaining the basic framework of its tight monetary policy.