Central Bank cuts interest rates, Yeni Şafak is dissatisfied again!

Yeni Şafak, a pro-government media outlet, criticized the Central Bank's interest rate cut yesterday with the headline "There is no such interest rate in the world." The newspaper emphasized that while interest rates move in parallel with inflation in developed economies, this gap is widening in Turkey.

The Central Bank's 100 basis point cut, which fell far short of market expectations, reducing the rate from 38 percent to 37 percent, caused discomfort particularly among industrialists and exporters.

KARAHAN’S OVERLY CAUTIOUS STANCE CRITICIZED

The report also drew attention to Central Bank Governor Fatih Karahan's past interest rate hikes. The newspaper criticized Karahan for raising interest rates by 500 basis points in a single move just one week before the March 2024 local elections, noting that his cautious stance during the current easing cycle has been met with backlash. The following statements were included:

“Central Bank Governor Fatih Karahan had implemented a 500 basis point interest rate hike in closed meetings despite there being no demand or expectation for it. However, the 'overly cautious' approach he has shown during the easing process is being received negatively by producers and exporters. Due to the slowing interest rate cut process, industrialists are struggling to maintain production, while exporters are losing strength against their competitors.”

REACTION TO INTEREST RATE POLICY FROM EXPORTERS AND INDUSTRIALISTS

Turkish Exporters Assembly (TİM) President Mustafa Gültepe criticized the interest rate policy in his statement to the newspaper, saying, "The high interest-low exchange rate policy has left labor-intensive sectors out of the picture for the last 2.5 years. Unless interest rates and inflation fall below 20 percent, no real relief will be achieved." Gültepe emphasized that he does not expect a significant change in the economy unless interest rates are cut, and stated that he does not expect 2026 to be any different from 2025.

CRITICISM OF INTEREST RATE POLICY FROM ASKON

The report also included the views of Orhan Aydın, Chairman of the Anatolian Lions Businessmen Association (ASKON). Aydın expressed the negative effects of the interest rate policy and stated that radical changes must be made to interest rates for Turkey to achieve economic relief.

News Source: 12punto