Central Bank as a shield for the government's 'absolute nullity': Emergency meeting and 40 percent interest rate on the table

The wounds inflicted on politics and law in Turkey continue to create irreversible damage to the economy. Recently, instead of fulfilling its primary duty of ensuring price stability, the Central Bank has taken on the role of a shield for the government's decisions, which are marred by "absolute nullity" (invalid from the start) due to their lack of legal basis and contradiction of universal legal principles.

Reserves Cannot Extinguish the Fire of Lawlessness

The deep shock caused in the markets by these anti-democratic moves in the political sphere and the lack of legal certainty is being attempted to be covered up only through back-door interventions. However, at this point, it is clearly seen that this process cannot be sustained merely by selling foreign currency and depleting Central Bank reserves. The atmosphere of panic triggered by the "absolute nullity" decisions and the flight of foreign capital have weakened the hand of economic management.

Expectation of a Shock Interest Rate Hike via Emergency Meeting

The depth of the current legal and political crisis is forcing economic management to take radical steps to calm the markets. Behind the scenes, expectations are growing that the Central Bank will hold an extraordinary meeting to extinguish the fire in the market and officially raise the policy rate to 40 percent or higher. The loss of confidence created by the government's extra-legal maneuvers makes shock interest rate hikes the only option in the economy.

The Bill Falls on the Public: A Triple Vise

The real price of suspending the law and sacrificing the economy to these political decisions will be paid by millions of citizens. If the expected shock interest rate move occurs, the public will be left in a spiral of "high inflation" that erodes purchasing power day by day, "high interest rates" that make borrowing impossible, and "low wage increases" that remain laughable in the face of the cost of living. Those with low and fixed incomes will be further suffocated within this economic vise created by steps that are legally considered "absolute nullity."

News Source: 12punto