A main opposition deputy recently slammed the finance minister's comments on Turkey's fiscal success, noting that public debt has nearly tripled in Minister Berat Albayrak's two-year assignment. The deputy added that the Treasury's public debt turnover rate is nearly 200 percent.
The trend in that started just before the presidential elections in 2018 and accelerated after the elections changed the chemistry of the economy in Turkey. Private sector in Turkey was restricted in every aspect. From pricing to sourcing, to investment licenses, all regulatory higher bodies worked to make the entrepreneurs feel that ‘the party state’ was watching them at every step.
Zeitgeist Turkey | Episode 7: As Turkish lira weakens to beyond 7 against dollar Erdoğan faces a choice
Duvar English’s editor-in-chief Cansu Çamlıbel and pollster Can Selçuki are joined by political economist Esen Çağlar to discuss the underlying factors behind the accelerating loss of value of the Turkish lira against the dollar. They look for answers to how the Turkish government is caught between a rock and a hard place by rapidly selling the Central Bank reserves. They also discuss whether Ankara can secure a swap line from the U.S. without giving up Russian S-400s.
Former advisor for Turkish Treasury: Excluding swap lines, central bank reserves $13.4 billion in the red
Excluding swap lines, Turkey's Central Bank's net reserves stood at $13.4 billion in the negative as of the end of April, according to economist and former Treasury Advisor Mahfi Eğilmez. The primary reason behind the foreign currency reserves falling by $28.5 is the sale of the Central Bank reserves, he argued. Eğilmez also said that there has been a decrease of $1.5 billion in foreign currency bank accounts in the past week.
In those countries where it is presented as they have a “floating exchange rate regime,” if their central banks are intervening at the exchange rate, the name of this in economy literature is “fear of floating.”
Since the COVID-19 crisis erupted, Turkish Central Bank’s reserves fell nearly 20 billion dollars. Now, the thought of “Can there be a swap line opened from the U.S. Central Bank Fedreserve ?” is in question.