Archive for the ‘Erdogan’ Category

Erdogan and Imran are letting emotions run far ahead of reason – Times of India

Command? Dear Mr President, surely as one who aspires to be a Muslim hero you have read the Quran. Therein stands the clear injunction: Allah has permitted trade and has forbidden interest/usury (2:275). Forbidden here does not mean negotiating what is low or middle or high forbidden means zero, exactly zero. Haram is haram. This is why all early Muslim scholars rejected interest. Many scholars still do today, particularly Arabs and Pakistanis. In 2014, the top ulema of Pakistan belonging to the Fiqhi Majlis said that even the so-called Sharia-compliant Islamic banking merely renames interest as profit and, as such, is deception. All banking, they concluded, is haram. Historically, banking was absent in Muslim countries until the 18th century because nothing except zero interest can be allowed. The Ottoman rulers of Turkey were, however, not ideologues. As pragmatists who ran an empire, they broke the ban on banking because they well knew that no banking meant no trading. This Western innovation had to be adopted come what may. But, to be safe, they first looked around for muftis who could justify European banking and found some. One can endlessly debate whether these justifications are genuine or manufactured.

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Erdogan and Imran are letting emotions run far ahead of reason - Times of India

Turkish lira hits record low as Erdogan aims to expel …

Turkish President Tayyip Erdogan gives a statement after a cabinet meeting in Ankara, Turkey, May 17, 2021.

Murat Cetinmuhurdar | Reuters

Turkey's lira fell to a fresh record low on Monday after President Recep Tayyip Erdogan said he was pursuing the expulsion of 10 foreign ambassadors.

The beleaguered currency was trading at 9.738 to the dollar at 11.45 a.m. London time on Monday, hitting an all-time low of 9.82 to the dollar earlier in the day.

Erdogan declared during a rally on Saturday that he had demanded the status of "persona non grata" be applied to the ambassadors of the U.S. and nine other Western countries after they called for the release of Turkish philanthropist Osman Kavala from prison.

The lira, having already hit a record low the previous week after Turkey's central bank cut its key interest rate despite growing inflation, is in for more pain if Erdogan continues on this path, analysts warned. It's fallen 24% versus the dollar so far this year.

"If Erdogan's threat is carried out it would trigger the worst crisis between Turkey and the Western world since the AKP got into power in 2002," Teneo co-President Wolfango Piccoli wrote Monday, referencing the president's political party.

Observers note that the Foreign Ministry has not yet appeared to carry out Erdogan's instructions, as "none of the diplomats has been formally notified," Piccoli wrote. Turkish Foreign Minister Mevlut Cavusoglu, responsible for carrying out the order, has not yet commented on the matter.

Erdogan's comments boosted fears of heightened tensions between the West and Turkey, hitting the already weak lira. Investors have long been concerned about the central bank's lack of independence from Erdogan, who has said that interest rates are "the devil" and holds the unconventional belief that cutting them will reduce inflation the opposite of what most economists say is the case.

If the ambassadors were to be expelled, "the lack of Western diplomatic representative in Ankara will hurt Erdogan," said Timothy Ash, emerging markets strategist at BlueBay Asset Management. "The 10 will reduce interaction with the Erdogan regime and investment into Turkey will suffer."

The 10 countries whose ambassadors were targeted by Erdogan the U.S., Canada, France, Germany, Denmark, Norway, Sweden, Finland, New Zealand, and the Netherlands account for half of Turkey's top 10 trading partners. The group also includes seven NATO members and six EU members.

"It goes without saying that the beleaguered Turkish Lira would fall under intense pressure, after setting various record lows over the past week," Teneo's Piccoli added.

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Turkish lira hits record low as Erdogan aims to expel ...

Turkeys President Follows His Own Advice Even as Economy Slips – The New York Times

ANKARA, Turkey President Recep Tayyip Erdogan sat for an interview on national television late last month, apparently seeking to calm nerves about Turkeys weakening currency and galloping inflation. But the reaction has been anything but calm.

He insisted there was no turning back on his newly announced economic plan, which has promoted policies that seem aimed at defying the laws of economic gravity, like refusing to tick up interest rates to combat rising prices and buttress the value of his currency.

Interest rates make the rich richer, the poor poorer, he said. We have prevented our country being crushed in such a way. We will not allow this.

Turkeys currency, the lira, began sliding virtually as he spoke, capping a day in which it lost 8 percent of its value. It has hardly stopped plunging since mid-November, hitting new lows every few days. Turks have watched staple goods double in price and fuel costs jump by 40 percent.

Mr. Erdogans interview on TRT cost the country billions of lira in just two hours, the opposition Republican Peoples Party spokesman, Faik Oztrak, commented. TRTs show with Erdogan tonight was the most expensive production in TRT history, he said on Twitter. A former prime minister, Ahmet Davutoglu, called on the president to stop. For Gods sake dont talk anymore! he tweeted.

But Mr. Erdogan keeps talking and rattling markets and eroding confidence in the lira and his stewardship of Turkey as he doubles down on a policy prescription that few if any economists agree with and that has left suffering Turks and others wondering why he is doing what hes doing.

Mr. Erdogan has been in power for nearly two decades, with much of his political success built on nearly continuous economic growth that has lifted millions of Turks into the middle class. Facing re-election in 18 months, he is sliding in opinion polls, largely because of the deteriorating economy. His focus is how to turn around the decline in time to boost his election chances.

He is trying to keep the boat afloat in his own way, said Akif Beki, who served as chief adviser to Mr. Erdogan when he was prime minister. He believes that he can turn things around and he can convince people again when elections come closer.

But for now, markets and analysts agree, his medicine is making what ails Turkey worse, and Mr. Erdogan has become increasingly isolated in his economic plan, having narrowed his circle of advisers since his early days as he gathered up virtually authoritarian power for himself.

In particular, Mr. Erdogans switch to a strong presidential system in 2018 has made him more reliant on a small inner circle rather than the wider scope of party officials and elected politicians under the earlier parliamentary system. That has given rise to criticism that he is surrounded by yes-men and increasingly detached from the electorate and economic realities.

Mr. Erdogan has replaced a series of Central Bank chiefs and finance ministers in recent years, confident that he knows the economy better than any of them and reasoning that by controlling monetary policy he could make decisions more efficiently.

He is not listening to the economists which is typical of strongmen, said Ozgur Unluhisarcikli, the director of the Ankara office of the German Marshall Fund of the United States. The president, he added, was increasingly less tolerant of dissent, particularly from within the party.

Indeed, what exasperates many, in businesses large and small, is that Mr. Erdogan is not speaking off the cuff or dropping comments inadvertently. He and his insular team in the presidency, squired by his attentive communications director Fahrettin Altun, have been rolling out prepared speeches, which he delivers live on national television with the aid of a teleprompter.

In his first speech two weeks ago, he expounded at length on his decision to go against most Western economic practice and instead follow China in lowering interest rates and driving down the national currency to balance out Turkeys current account deficit and make its products more attractive for export. He called on Turkish citizens to prepare for a historic struggle in what he cast as an economic war of independence.

He vowed that the country would no longer have to surrender to high interest rates, inflation and currency traps and he promised to improve production, employment and clear the current account deficit.

Turkey may for the first time in its history have the opportunity to follow an economic policy in line with its own needs and realities, he said.

The lira began a free fall within hours of his speech, losing 15 percent of its value in one day. Undeterred Mr. Erdogan gave another speech the next day and several more since, each time reaffirming his determination to lower interest rates in pursuit of growth.

He has reacted to the price increases not by adjusting his own approach but by lashing out at suppliers and warning them not to hoard goods and pressuring supermarkets to keep prices down. Social media was alive Thursday with talk of price increases for toilet paper and milk products.

I am stunned by the increases, said Mehmet Eraltay, who was selling bagels from a cart on the capitals main square Wednesday. It think the end of the world is coming.

Analysts struggled to explain what has prompted Mr. Erdogan to insist on a monetary policy that goes against most widely accepted economic practice of controlling inflation by raising interest rates.

The only thing that is going on now is the upcoming elections, said Mr. Unluhisarcikli, of the German Marshall Fund of the United States. Mr. Erdogan is sliding in the polls, largely because of the economy, and is seeking to regain the momentum ahead of elections in 2023, he said. He is looking for a way out.

Most economists say the Chinese example would take a decade to take effect and could not bring economic relief within six to eight months as Mr. Erdogan is promising.

Mr. Erdogan is also constrained by his political ally, Devlet Bahceli, the right-wing leader of the Nationalist Movement Party, who frequently applies the brakes to proposals by Mr. Erdogan that would improve Turkeys international standing.

Even limited efforts to restore democratic institutions and the independence of the judiciary could go some way to answer investors concerns, Mr. Unluhisarcikli said. It could also help Mr. Erdogans standing with voters, who are feeling increasingly anxious and ignored.

One of the few polling consultants who continues to advise both Mr. Erdogan and his opponents, Mehmet Ali Kulat, said he had to deliver uncomfortable news in their most recent meeting.

His most recent survey found that around 60 percent of respondents were very uncomfortable with the economic situation and 41 percent said they could not meet their essential needs.

There is widespread distrust of government institutions and even anger in reactions of respondents to some questions, Mr. Kulat said. This is something beyond politics.

Yet the president, who is known to closely follow opinion polls, dismissed the poor results and insisted he would still win, Mr. Kulat said. Mr. Erdogan believes the data about the economy that we and other pollsters give is exaggerated, he said.

The leader of an Islamist party, Temel Karamollaoglu, who met with Mr. Erdogan in November, also described the president as dismissive of his concerns.

Mr. President believes that all developments in the economy and foreign policy are fail-safe, he said in an interview published in an online news outlet, Gazete Duvar. He doesnt see any problem. I told him, The information coming to you may be mistaken or different. He doesnt share that idea.

But Mr. Beki, the former adviser, said Mr. Erdogan would be focused on preventing the spread of bad news rather than questioning it.

He believes he knows best, he said. I dont think he listens to advice.

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Turkeys President Follows His Own Advice Even as Economy Slips - The New York Times

Ghalibaf, Erdogan stress expansion of bilateral relations – Mehr News Agency – English Version

"I hope that the Vienna talks on the implementation of the nuclear agreement will be concluded fairly," the president of Turkey said in the meeting withIranian Parliament Speaker Mohammad Bagher Ghalibaf in Istanbul on Friday.

Recep Tayyip Erdoan further urged the international organizations to help Iran in dealing with the influxes of Afghan refugees.

Ghalibaf, for his part, emphasized in the meeting that the comprehensive document of cooperation between the two countries is being finalized, which is a symbol of a serious willingness of both nationa to develop relations.

The Iranian parliament speaker further said that the big powers must learn that they must not try to impose their will on other countries,

He further said anagreement in the Vienna talks will be reached if the major western powers show respect for other countries'interests.

Iranian Parliament Speaker Mohammad BagherGhalibaf arrived in the Turkish city of Istanbul on Wednesdayevening to participate in the meeting of the 16th Parliamentary Union of OIC members.

KI

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Ghalibaf, Erdogan stress expansion of bilateral relations - Mehr News Agency - English Version

Erdogan says Turkeys interest rates will continue to fall – Aljazeera.com

Cheaper cash will boost manufacturing, create jobs and slow inflation, Turkish President Recep Tayyip Erdogan said in a TV news interview. The lira extended losses after his remarks, falling as much as 8.1 percent against the US dollar.

Turkeys interest rates will continue to fall, President Recep Tayyip Erdogan said, making a case for an economy freed from dependence on short-term foreign cash and transformed into one that thrives on local production and exports.

Cheaper money will boost manufacturing, create jobs and slow consumer inflation currently running at four times the official target of 5%, and the currency will eventually strengthen, Erdogan said in an interview with state broadcaster TRT on Tuesday.

Turkey wont try to attract capital flows that leaves its economy at the mercy of hot money, or investments that can be quickly withdrawn, Erdogan said. His pledges put the Turkish central bank in an awkward position after monetary policy makerssaidthey would assess ending interest rate cuts as early as December. Even so, the Turkish lira lost almost 28% of its value since the bank started its current easing cycle in September and lowered the benchmark rate down by 4 percentage points to 15%.

Our country has now come to the point of breaking this vicious cycle, and there is no turning back from here, Erdogan said.

The lira extended losses after Erdogans remarks, falling as much as 8.1% against the U.S. dollar. It was trading 6.4% lower at 13.7058 per U.S. dollar as of 11:07 p.m. in Istanbul.

Price Shocks

Erdogan unveiled his most recent policy stance a little over a week ago, pushing for lower interest rates to turbo-boost growth and revive his flagging popularity ahead of the 2023 vote.

Pushing for lower borrowing costs is hardly new for the Turkish president, whose proposition that cheaper money slows inflation defies mainstream economics. Driving credit-fueled growth before elections has worked for him in the past.

The accumulating impact of that policy, rising income inequalities and the damage wrought by Covid means the potential social costs are much bigger this time. Price shocks resulting from the liras freefall are making life more expensive in the nation of 84 million.

Continuing old policies based on false premises would only exacerbate those problems, Erdogan said.

The high interest rate policy imposed on us is not a new phenomenon, he said. It is a model that destroys domestic production and makes structural inflation permanent by increasing production costs. We are ending this spiral.

The government is working on two support programs aimed at creating 50,000 new jobs to mitigate the short-term volatilities, the Turkish leader said.

Private companies will get 50 billion liras ($3.7 billion) in new loans under one of the programs supported by the Credit Guarantee fund. Interest rates on the loans will be as much as 7 percentage points lower than the market levels, contributing to an estimated growth of 10% in Turkeys gross-domestic product this year, Erdogan said.

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Erdogan says Turkeys interest rates will continue to fall - Aljazeera.com