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Of course, the real story amid this monetary melange is that the Erdogan moustache grown by Uysal since he was appointed central bank governor has brightened his career prospects.
Uysal also made a point of saying that the monetary policy committee “independently” cut the benchmark rate at its last meeting.
Curiously, on the eve of Uysal’s press briefing, finance minister and Erdogan son-in-law Berat Albayrak told financial media in a closed-door meeting that the rate cut would probably be followed by reduced loan rates, especially from state-run lenders. The day after Albayrak’s meeting with journalists, the finance ministry said in a July 31 statement that the comments from the minister on falling interest rates referred to the overall trend in Turkey, and did not directly refer to central bank policy.
Attempts to define the Turkish economy as a “remote economy” are apparently in circulation. The convertibility of the Turkish lira is also being questioned.
Albayrak also said Turkey will likely run a budget deficit of below 3% of GDP this year, with an increase in revenue coming in the second half of the year. Even though the government did not feel the need to make an official announcement, the Treasury last week received the first tranche of additional transfers from the legal reserves of the central bank. It has already spent the windfall on payments, according to local media reports. Nothing to see here, says Albayrak. All quite standard stuff. Patently, Albayrak should have referred to the transfers from the central bank in relation to the H1 revenue increase, given the collapse in tax collection.
Albayrak also reportedly said $10bn had arrived in Turkey since May. The portfolio inflows the finance minister spoke of are not visible in the balance of payments, but why kick up a fuss in a Turkey where the central bank reserves are not even questioned anymore. Those who trusted in Turkey earned 20-60% across last year, while those who succumbed to negativism lost 10-15%, Albayrak—who says he taught banking and finance at Marmara University, the same institution at which Erdogan graduated one year before the relevant faculty was established—also reportedly said. The strategy of pushing Turkish residents sitting on FX into losses in order to make them shift their savings into lira would
14 TURKEY Country Report August 2019 www.intellinews.com