Striking claim about the Central Bank before the elections! 'To avoid drawing Erdoğan's reaction...'

Fatih Karahan, who was appointed as the Governor of the Central Bank of the Republic of Turkey (TCMB) on February 3 following the resignation of Hafize Gaye Erkan, kept the policy rate steady at 45 percent after the Monetary Policy Committee meeting on February 22.

10haber columnist Erdal Sağlam claimed that the Central Bank did not increase interest rates before the March 31, 2024 local elections to avoid drawing the reaction of AKP Chairman and President Recep Tayyip Erdoğan.

Stating that if the Central Bank had made a small interest rate hike, commercial loan rates, which would not have exceeded 56-57 percent, rose to 70 percent, and interest rates on consumer loans rose to 80 percent, Sağlam wrote, "The panic that started in the markets following the higher-than-expected inflation figures in February, even if limited to some extent, still continues. The decisions taken by the Central Bank in response to this panic, which severely restricted loans, caused interest rates to increase significantly."

Arguing that the Central Bank did not go for an interest rate hike to avoid drawing Erdoğan's reaction, Sağlam stated, "The perception has formed that the reason why what was necessary could not be done is the president, and therefore the Central Bank management is acting politically. Along with this, the impression that there is no guarantee that what is necessary will be done after the election has strengthened, and these factors played an important role in the panic that occurred in the markets."

For the full article, click here