Before the second round of presidential elections on May 28, President Tayyip Erdoğan told CNN International that if elected, he would continue to cut interest rates following his unorthodox belief that “high interest rates cause high inflation” and that “he had already started to see positive results.” We all wish for a better tomorrow and
The flow of funds fuels the economy. By bringing together the borrower and the lender, financial markets direct savings into the economy. Savings finance production, production generates more income and hence more savings. What enables this circular flow is the payment to the saver. In modern financial systems, the saver receives an interest payment in
Emerging markets’ currencies depreciate rapidly during times of crisis. This is because the risk appetite declines during crisis and emerging markets experience capital outflows. Those with macroeconomic imbalances are affected the most.Because Turkey was far from achieving price stability when COVID-19 crisis hit, it is experiencing more problems on the currency front. The rate cuts