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Dollar confession from the Palace… ‘It could have been intervened earlier’

A statement came from the Palace regarding the sharp fluctuation in the dollar. President of the Presidential Finance Office Prof. Dr. Göksel Aşan said, “It could have been intervened earlier, before Kur threw himself here.” Aşan, who participated in the BloombergHT live broadcast, said, “Of course, a model will not emerge by predicting that the rate will go to 20-30 liras.”

Aşan said, “The movement in the currency was not predictable, yet it could have been better managed. It could have been intervened sooner before Kur got himself in here. Is there any delay there, of course it can be. It is not possible to act faster than this on the side of the state. State control is more of a mechanism,” he said.

Speaking to BloombergHT, the prominent statements of Aşan are as follows:

In the coming weeks, you may hear of a few more products that secure the Turkish lira saver.

After 2008-2009, when the exchange rate went low, we could say permanent disorders occurred. In the 2012-2019 period, we have a four-point regression in intermediate goods.

We have experienced a very rapid growth in the service sector. This was another factor that reduced factor productivity. I think this acceleration will take us forward in factor productivity.

For a long time, a model based on import substitution was in progress. Recently, it has become flesh and bone. There the main goal has not changed at all. The goal is to reduce imports and reduce exports.

The main parameter here is the current surplus. We will most likely see the current account surplus in April. It is not possible for Turkey to continue with long-term current account deficits. It is not possible to reduce inflation with this current account deficit.

The parameter that we will evaluate in the upcoming period will be the current account surplus.

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“I DON’T SEE A SUSTAINABILITY PROBLEM ON THE EXPORT SIDE”

Previously, Turkey had a current account surplus. All previous current account surpluses emerged after a recession. What will be different this time is that we are providing the current account surplus with high growth.

Green transformation also brings an opportunity to Turkey. European countries will try to get the products as quickly as possible. We can count many things like this. I do not see a sustainability problem on the export side.

“I EXPECT NEGATIVE INFLATION IN JANUARY”

December is not a month to be taken as a base in terms of future inflation expectations. In December, there was serious foam in pricing.

In an environment where the exchange rate continues at these levels, I expect negative inflation in January due to the price corrections. Savers should not take into account the negative inflation in January, it will also be due to the base effect. Inflation after February will be the period that will determine the inflation expectation for the upcoming period.

I think that the exchange rate pressure on inflation will remain limited. I think we will complete 2022 with an inflation below the current deposit rates. We will probably complete 2022 between 15-18 percent.

I know that the Treasury is working on the budget. In 2022, both tax revenues and expenditures will be higher than predicted. I know there is a study on the plan.

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