The date that puts Mehmet Şimşek in a difficult spot! Plans may be suspended

The lawsuit filed regarding the 38th Ordinary Convention held by the CHP in 2023 has moved to the center of the agenda with its economic as well as political implications. As the legal process deepens debates within the party ahead of the hearing to be held at the Ankara 42nd Civil Court of First Instance on June 30, experts have drawn attention to the impact of this critical date on the markets.

In particular, the expectation that the convention, which saw CHP leader Özgür Özel take the chair, could be canceled by the judiciary has turned into a new source of tension between the government and the opposition.

While the shock experienced in the markets following the detention of Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu on March 19 is still fresh in memory, economists have issued warnings against a possible second major wave that could occur on June 30.

According to the report by Tolga Uğur from Sözcü, experts agree that if the convention is canceled on the grounds of 'absolute nullity,' the markets could be shaken by the perception of political interference.

Economist Güldem Atabay stated, "The cost of June 30 would be at least as heavy as March 19."

Economist Ömer Rıfat Gencal said, "The Treasury's TL borrowing cost is still 5 percent higher than it was before March 18. If there is political pressure, this increases poverty."

WARNING REGARDING AZERBAIJAN AND RUSSIA

Economist Dr. Murat Kubilay pointed out that the decision in question could create a perception that Turkey is "shifting toward an authoritarian model similar to Azerbaijan and Russia." He shared the view that this situation would undermine international confidence in Turkey.

ALB Investment Chief Economist Assoc. Prof. Dr. Filiz Eryılmaz made a more technical assessment and issued the following warnings:

"The markets would be disturbed by an absolute nullity scenario. There could be volatility in the exchange rate. The main impact will be seen in Central Bank reserves. As for Borsa Istanbul, levels below 9,000 points could be seen."

It was also emphasized that the interest rate cut planned by the Central Bank for July could be at risk due to a possible decision on June 30. According to Filiz Eryılmaz, a 2.5-point interest rate cut is on the table in the base scenario. However, if inflation data comes in positive, this rate could rise to 3.5 points. Nevertheless, a possible judicial intervention on June 30 could render all these plans void.

ŞİMŞEK'S BALANCE COULD BE SHAKEN

Former banker Murat Aysan stated that if the Central Bank "gets through June 30 without any trouble," it could cut the policy rate in July. However, if such a political development occurs, the economic management's hand will be weakened.

This picture could make it difficult for Treasury and Finance Minister Mehmet Şimşek to implement his economic program. The economic management, which set out with the claim of a "return to a rational ground," could face a serious risk of loss of confidence due to the impact of political tension.