WATCH OUT FOR DOLLARIZATION DANGER!
It has been reported that Turkey was experiencing a hidden devaluation, and Turkish Lira was going to continue to lose value, however, financial economics was not to get involved in politics. In an assessment made by the economists regarding the decrease in Turkish Lira against the increase in Dollar and Euro lately, it has been indicated that if the Turkish economy did not take the necessary measures, it would face the danger of dollarization.
“Seeking refuge in foreign exchange became a habit”
Halit Soydan, Lecturer at IUE Department of Economics, and Former Managing Director of Yapı Kredi and Garanti Banks, stressed the importance of not getting financial economics involved in politics, and stated that the Grand National Assembly of Turkey was not under the domain of any political party. Soydan said, “Up until 1980's, it was forbidden to touch ‘foreign currency’! Now, it’s in our genes to ‘seek refuge in foreign exchange’. Nowadays, ‘dollarization’ or ‘eurolization’ is a hot topic again. We are not Andorra, San Marino, or Vatican. These are mini countries that use Euro as their national currency even though they are not members of Euro region. We live in Turkey. Turkey is a leading world country. Its money is its honour. I still trust in the future of my country and currency. Even if my national currency lost a value of 33% during the last year, I would not make a call for dollarization for future.”
‘It’s dangerous if the virus re-enters!’
Prof. Dr. Hakan Yetkiner, Vice Dean of IUE Faculty of Business, indicated that the Turkish Lira would continue to lose value at the rate considered appropriate by the economy management, and he stated the following:
“We don’t know this rate. But, it may continue until current deficit gets less than 5 % of GDP. Considering that this rate is about 7% now, we might have to wait until Turkish Lira loses a little more value for a sustainable current deficit. However, since the economy management does not provide clear explanations on this issue, it’s early to say anything right now. What the economy management does not consider is the danger of dollarization. Turkey, entering a rapid dollarization process after the 80’s, got rid of this illness hardly. The re-entry of this virus into economy may cause uncontrollable outcomes in the future.”
''Hidden devaluation took place”
Prof. Dr. Yetkiner, who pointed out that Turkish economy management wanted to take precaution for current deficit for a long time, stated the fact that US Federal Reserve announcing to stop buying bonds in May 2013, Gezi protests and December 17 events offered the much needed ambiance for economy management. “Well, yes, a hidden devaluation took place in line with a conscious decision of economy management,” stated Prof. Dr. Yetkiner.
