Minute by Minute December 17 Financial Crisis

President Recep Tayyip Erdoğan ignores that what happened on December 17 was a financial crisis. Main opposition Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu names it as “Turkey being dragged into a disaster,” and openly questioned the health of Erdoğan’s “mental faculties.” Opposition İYİ (Good) Party leader Meral Akşener said that the crisis is now a “state administration problem” and reiterated her call for snap elections. Both economy and politics have taken a dangerous path.

Until December 17, it was possible to describe the crisis with incredible losses in the value and purchasing power of the Turkish Lira. Borsa Istanbul (Istanbul Stock Exchange) was on the rise for weeks with trades on TL as important foreign players in the stock market has already withdrawn from the game.

The stock market was what President Tayyip Erdogan and the AKP government clinging to ignore the crisis. The minimum wage, 2825 TLs when it was announced at the beginning of 2021, was worth 384 US dollars. It had become 275 dollars when the government announced it as 4250 TLs with a 50 percent increase at 3:30 PM on December 16. A full day later, on December 17 at 3:30 PM, it was 256 dollars. But the stock market was rising, and the government-controlled media highlighted it as the success of the new economic plan.

Erdoğan said not to compare the minimum wage with the dollar when he announced it, but on the morning of December 17, the rush to the dollar continued, and it exceeded 16 TLs.

“We observe the developments with astonishment”

When I went to lunch with my friends at around 1:00 PM, one dollar was 16,60 TLs. When we ordered our coffees afterwards, it exceeded 17 TLs and raised to 17,20 TLs in a short time. While we were drinking our coffees, the Central Bank intervened in the market by selling dollars for the fifth time in two weeks. When our not-more-than-one-hour lunch meeting ended, the dollar was 16,60 TLs, and the market had swallowed some of the country’s valuable foreign exchange reserves.

The initial reaction from the business community was harsh, too.

Istanbul Chamber of Industry (ISO) President Erdal Bahçıvan posted on Twitter at 1:55 PM:

“We are observing (the developments) with astonishment that the Central Bank, which cut interest rates (from 15 to 14 percent) yesterday, released its most valuable foreign exchange resources to the market today.”

At the same time, prominent business organizations such as TÜSİAD (Turkish Industrialists and Businessmen Association) and TOBB (The Union of Chambers and Commodity Exchanges of Turkey) were preparing to express their concerns.

As a matter of fact, at 3:24 PM, TOBB President Rifat Hisarcıklıoğlu posted the following Twitter message:

“The turbulence in the markets and the level of exchange rates concern and negatively affect many of our companies. We expect immediate measures to be taken to stabilize the markets and ensure predictability.”

It was almost like crying out: “do something, if you go like this, we’re going down”.

“The market has given up”

The stock exchange regarded this cry from TOBB, which has significant supporting power in the business world, and the ISO’s statement as the inability of the government to get out of this crisis. In a phone call, an important name in the economic circles, “The market gave up”.

The stock market went into a rapid decline. The stock exchange, which broke a record with 2406 points at 1:15 PM, started to fall to 2335 points at 3:55 PM. It lost 8.5 percent in 1.5 hours until stock trading was halted at 2071 points at 5:20 PM.

This was perhaps good news for foreign investors waiting for it to get even cheaper to buy companies in Turkey. At the same time, there was news that the Wealth Fund (Varlık Fonu) was at the table to buy 55 percent of Türk Telekom shares.

Meanwhile, we learned from the following Twitter message that CHP leader Kılıçdaroğlu called TÜSİAD President Simone Kaslowski and invited him to express concerns:

“I called the President of TÜSİAD. Turkey is on fire. Are we going to watch a person who has lost his mental faculties drive the country to suicide? Everyone should talk now, everyone! We want an election. What Erdogan and Bahceli have to do is show the nation the possibility of their departure,” the CHP leader posted. 

Kılıçdaroğlu: “no one should remain silent“

I called TÜSİAD. They were not content by Kılıçdaroğlu’s statement because they were hesitant to publish a press release that they had already prepared after he called it out to avoid misinterpretation.

As a matter of fact, in the following hours, at 9:23 PM, Kaslowski addressed Kılıçdaroğlu on his Twitter account:

“Dear @kilicdarogluk, TÜSİAD, as an independent and voluntary business organization, has been sharing its views on the problems we are experiencing in the economy for a long time with public institutions and the public, as I said on the phone, and will continue to do so,” he posted. 

Before this statement came, I talked to Kılıçdaroğlu. He was going to Kayseri for today’s (December 18) mayors meeting.

“No one should be silent anymore. They (AKP and MHP) cannot rule (the country). Only one person decides. Either he no longer listens to his entourage, or his entourage is his partner. They are driving the country into disaster,” he said.

“The business circles are worried. Nobody wants to buy or sell goods. They are unable to calculate the cost. If there is a break in the supply chain, it (crisis) will become more serious. Let them call for an early election, the dollar will also fall, and the economy will recover,” he added.

Akşener: “it is turning into a state crisis“

I spoke with the leader of the IYI Party, Meral Akşener, at the airport on her return from her visit to the southern provinces. She repeated her “state crisis” stance.

“It is turning into a state administration crisis. Seyfullah Nebati, brother of the Minister of Treasury and Finance Nureddin Nebati, stated that he anticipates Central Bank to cut the interest rate by one hundred base points one day before the Monetary Policy Committee convened to decide the interest rate. Who had made money with this information?” she said.

She underlined that what Seyfullah Nebati did should be considered “insider trading.”

“Did the prosecutors open an investigation on insider trading, that is, making commercial profits by confidential business information? Why there is no investigation? Does the economy properly work where there is no law or justice?” she said.

“This is the administration crisis. We are on the verge of a cliff. Underneath this lies the partisan presidential system. We must go to the election as soon as possible,” she added.

What about dollar vs TL, you ask? One dollar was 16,60 TL on the morning hours of December 18 when I wrote this article. I don’t know what will happen the minute you read it.

But this is how the crisis of December 17 proceeded. The crisis, which affects our pockets and the national security and foreign policy of the country, cannot be managed, which is another problem.