Page 53 - BNE_magazine_bne_September 2019

bne September 2019 Southeast Europe I 53
have the data to allow it to keep cutting the official inflation figure.
You see, times are now getting so good in Turkey that the lira would remain under control even should an atomic bomb be detonated underneath the central bank.
“[The cut is] larger than the 250bp cut that both we and the consensus had anticipated. The lira weakened following the decision but, at the time of writing, is actually up on the start of the day,” Tuvey noted.
Once upon a time, there was a currency that was thought to be subject to a floating exchange rate regime, and there were some official inflation figures suggesting a sharp declining trend...
Not many foreign investors left
There are not many foreign investors left in Turkey and the remaining vulture funds are writing profits over falling interest rates along with local lenders.
How long Turkey’s latest Tulip Era may last remains in doubt. There is no available market research based on the economic realities. All there is to go are the synthetic official figures and the manipulated exchange rate.
“Interesting in my mind that the growth cycles/sudden stops in Turkey are getting shorter – 2006-2012/13 then to 15/16, and to 2018. So six years, then three, then two, and the next cycle...,” Ash said in response to a Bloomberg
op-ed entitled “Erdogan Economics Weaponized as Central Bank Looks to Cut Rates”.
“Turkey is about to embark on one of the greatest central banking experiments in emerging markets – and the timing couldn’t be better,” Cagan Koc of the news agency observed, prior to the MPC meeting.
Well, just to remind you folks, given the dangers of forgetting thanks to blithe
Risk of desire
“The main near-term risk for Turkey is the authorities’ desire to boost growth via lower interest rates and credit expansion, which could jeopardize the stability of the TRY, as policy stimulus widens the current account deficit and requires more external funding,” Ugras Ulku of the Institute of International Finance (IIF) said in a research note entitled “Turkey: Idiosyncratic Risks Weigh On Outlook”.
“The agenda is to lift growth at all cost and to lift the cloud hanging over the ruling AKP”
mainstream media reports, not only was Turkey’s central bank governor lately fired, the US Congress keeps pressuring Trump to sanction Turkey over its penchant for buying Russian missiles, the real economy in Turkey has crumbled and summer won’t last for ever. But in the ever-expanding populist madness, with “Britain Trump” (as the grammatically challenged US president described new UK PM Johnson) now taking to the big stage, who knows how long the distractions of bluff and bluster and the fake taking of offence can last. Long enough, for the conned to slip over the cliff-edge, very likely.
“The agenda is to lift growth at all cost and to lift the cloud hanging over the ruling AKP,” Ash also said following the MPC announcement.
Turkey is the only country in the Central and Eastern Europe Middle East and Africa (CEEMEA) region where output
is projected to decline in 2019, he added.
The ongoing Kamikaze-style policy making for the Turkish economy remains one of the main supporting arguments driving rumours that Erdogan is in fact getting ready
for snap elections to catch the strengthening opposition on the hop. If that’s the case and voters buy into it, cheap money could eventually bring about an expensive ending for any hopes of one day developing sound markets that will stand the test of time and not require vast swathes of the restive part of the population to be subdued with the practices of authoritarian polarisation.
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