Turkey's Economy: Dollar, Interest Rates, and Inflation Challenges

The economy's instability and political challenges signal upcoming significant changes in the dollar, interest rates, and inflation, impacting citizens and businesses.

### Turkey's Economic and Political Challenges: Inflation, Exchange Rates, and Political Dynamics
* 📉 Turkey's foreign exchange reserves have decreased by **$5.85 billion in a week**, with net reserves falling by **$5 billion**, indicating economic challenges.
* 🗳 Recent polls show **81.1% believe the economy is poorly managed**, with **33.8% support for CHP** and only **6.1% for AKP** in hypothetical elections.
* 📈 The government's economic plan, led by Şimşek, is facing difficulties, with **inflation and exchange rates becoming major concerns**.
* 💸 The plan includes **printing money, lowering interest rates, and stimulating demand through consumer loans** until 2025, with a hope to **control inflation and the exchange rate** until 2026.
* 🛩 An analogy is made where AKP's economy is compared to a plane with engine trouble, diving to **extinguish the fire** but struggling to **pull up afterwards** due to weight.
* 🏛 The government is criticized for favoring certain companies in tax relief while burdening others, creating **discontent**.
* 🌍 Foreign policy actions, such as recent events with Israel, are seen as impacting **foreign investment and economic plans**.
* 🔮 The outlook predicts ongoing **high inflation (40-45%)** and exchange rates between **42-53** in 2025-26, with a **pre-2028 election becoming increasingly likely**.

I respectfully greet all the viewers. My dear friends, when we look at the dollar, interest rates, and inflation, we really need to be ready for some big surprises in the coming days. Of course, there are predictions about these. Give or take a few. You can also predict what might happen. But look, there are such big changes in politics that the numbers and data are giving us signals. In both the dollar, interest rates, and inflation, as I said, new figures are on the way. Now we need to analyze these, we need to reveal the changes and crossroads in politics so that we don't speak without knowing the facts. What will happen to us, to our families, to our companies when you borrow, lend, invest? Where will all of this lead us? We can solve these comfortably one by one, my friends. Look, Şimşek is trying to accumulate reserves. We said we have a 1% policy rate; it's the world's biggest usurer's interest rate. However, some problems are starting to arise here. When we say problems,

In the one-week period ending in July, we see that reserves decreased by approximately 5.85 billion dollars. Looking at the reserves, which were 15.9 billion dollars in the week of July 19, I see that they have decreased to 148 billion dollars. When I exclude the swap transactions I made and look at the net reserves, I still see a decrease of 5 billion dollars. I observe a parallel decrease with the information I provided. Friends, in the middle of a program, sales of government domestic debt securities, namely bonds, or the decrease in reserves, and other signs are not good. We had discussed these; I will not dwell on this further. However, in the upcoming period, the economy is not just about the economy, finance is not just about finance, and the state of politics is not just about the state of politics. Political parties involved in the political arena somehow act and make decisions to continue their existence, unfortunately, prioritizing the interests of the party over our interests. Look, related to this, there is a piece of news from the political front. Let's see, let it come on the screen, friends. Look, what is the issue here? When we ask, let's see on the screen. What is the situation with Hadise, Ozer Sencer, and Metropol Research?

You may have seen in the media Recently, a question was asked in our country about whether the economy is being managed well or poorly, and Look at the answer, friends, I think it is poorly managed by 81.1%. I think it is managed well by 16.3%. These 16.3 friends think that the oligarchy of the AKP, friends, because all the major resources are under their control, they think it is managed well. And below, you can see the distribution according to the parties. Of course, when the situation is like this, what happens, of course, this incident goes, friends, and what does it reflect, it reflects on the votes. If there were elections for Members of Parliament again, there is a survey asking whom you would vote for, and when the undecided are distributed, you see that CHP's vote is calculated as 33.8% and AKP's vote is calculated as 6.1%. There is a tremendous difference between them. Considering the legendary election results of the AKP in the last 20 years, it really shows us that they are in a very problematic situation. So, here, we know that the most important factor in this gap widening is the economy. When we put these data side by side and look at them,

What will happen to the dollar, what will happen to the interest rate? In the upcoming period, will there be an early election or not? While managing family and work, I want to share the results I obtained from these data that you can use. As you can see, there is already a significant reaction to Erdoğan and Şimşek, and AKP's vote, no matter what anyone says, is experiencing a significant erosion. Secondly, look, why do we say that you are canceling the tax debt of partisan companies worth 660 billion liras, but attacking the debt of municipalities owned by AKP before March, which is 96 billion liras? Now, these municipalities have passed to CHP, but who was managing them before March 31st? Friends, these municipalities were certainly managed by AKP, so tightening the throat of the organs serving the public also creates an allergy. And most importantly, the main reason for this allergy is as follows: look, I have been saying for 6 months that the budget deficit is 747 billion liras, right? Whom do you blame for this deficit? It equals the market value of the Holding. So, where does this money come from? It comes from the citizens. Now, the citizens no longer have the power or remedy to give this. Please.

When they say early election, don't just say it won't happen in Turkey and make a comment with your hands tied behind your back. The situation in Turkey in August 2024 is as different as day and night compared to August 2023 and 2022. For those friends who cannot make this distinction, I cannot find anything to say. So, it seems like you are clueless, but while the citizens are suffering, there are significant changes in the political equation. That's why we are making this video. In this political equation, you see the research of the metropolis. This will affect the dollar, interest rates, and inflation, my friends. Let me tell you this: when there is more than 180% dissatisfaction, if the reserves were as strong as in 2018 or 1999, Şimşek would have been dismissed long ago, my friends. However, if such a move is made, Turkey would face a major balance of payments crisis, and both domestic and foreign investors would close the last remaining small loans. It is obvious that Şimşek's game plan in his mind has not been realized. If this game plan cannot be implemented, it equals

High inflation equals a high exchange rate. Let's put this observation aside very well. The game plan in Şimşek's mind has not been implemented properly. How do we understand this? The trimming of the tax package, giving great rights to the oligarchy in this tax package, and another point, such as the state not putting its hand under the stone in terms of savings. Friends, what has prevented the implementation of this plan is situations like the program not working properly and in foreign policy, when actions are taken just to consolidate the content, what will happen as in the example of Israel, my friends? Again, weaknesses will emerge in the entry of foreign capital, which is an important game plan of Şimşek. Those who do not believe, look at the Istanbul Stock Exchange, my friends. There is an index that cannot exceed 11,000. Yes, it will go up to 14,000 or 15,000 somehow to please the investors, but the important point is that the entries into the stock market benefit the national economy much more. At the moment, it benefits the individuals and groups there more than they do. However, it is turning towards the national economy now. So, look, there is such a situation at the moment.

As inflation rises in spring, at the same time, your game plan not working out, in addition to the lack of actions to reduce inflation in agriculture and industry, as we mentioned in previous videos, what will it do will create a foreign exchange control problem. Also, the interest pressure in the business world cannot continue, my friends, these interest rates must come down. Dear friends, this will bring the exchange rate issue to the forefront. Iso announced the second Iso 500 data, there is tremendous cost pressure, financial cost pressure on them, sales have decreased. Therefore, you cannot continue this. So, two reasons, two reasons will come up with the breaking of Simsek's game plan. Inflation going up and interest rates needing to be lowered, this will bring the exchange rate issue to the forefront. What is the plan here then, what is the plan in the president's mind? Let me tell you, in 2025, by implementing fiscal policy, by lowering interest rates through printing money, trying to stimulate the business world, create demand with consumer loans, and trying to implement those old plans, and somehow keep CHP busy, and also adjust the dose of the opposition.

He is trying to keep it to a minimum, which we can partially say he has succeeded in. He also says with Şimşek, Let me control the dollar and inflation to the best of my ability through Şimşek until 2026, then let's go back to our old policies. By 2029, things will be a thousand times better than what we are experiencing now, but let me win the election, we will somehow solve the rest. However, look, linking to the dollar, interest, and inflation from here, I will connect them. This plan is very challenging. The reason why the President is having a hard time controlling inflation and the exchange rate completely is that, as of now, it is difficult. Let me correct myself, I apologize. He is currently struggling to fully control inflation and the exchange rate. Let me give you a concrete example. If the AKP were an airplane, friends, there is a fire in its engines. Look, there is a problem in the economy, there is a fire in the engine. To extinguish this fire, it is diving from the highest point to the lowest point due to the wind effect, trying to put out the fire in the engine. However, the plane is so heavy that when it wants to pull up, it will crash after the fire in the engine is extinguished. Unfortunately, both the dollar and the Turkish Lira are in very troubled waters.

Because the reasons that weigh down the plane, causing the AKP to stumble and lose votes, are inflation with no permanent solution, unemployment, the exchange rate going up. Look, in the fall, inflation will be created. Now, when the exchange rate went from 32 to 33, then to 35-36, when it reaches that point, inflation reflected from the external world will find you, and it will reveal deficits, budget deficits, price increases, taxes, trade deficits. It will create even greater demand for the exchange rate, causing the AKP to lose votes, reasons that weigh down the plane, reasons that decrease the party's votes. These are the important things now. What is needed for this plane to lift its head up, for the head to be raised in the air, is engine power. What is engine power? Since 2002, the engines of the AKP promised to go to Brussels with foreign capital. They said, I will comply with the decisions of the European Union and the European Court of Human Rights. I will respect Democratic Rights and freedoms, right? All of these have been put on the shelf. Therefore, foreign capital is burning in flames, those engines are not working on the wing, and therefore, without foreign capital, it is difficult to fix the nose of that plane. Where does this all end up?

Friends, look, the bottom line is this: everyone should calculate their accounts based on an inflation rate of over 40-45%. In 2026, this inflation will not decrease unless the Inflation Law is passed. After that, this inflation will not decrease. With a population heavily dependent on imports in both food and industry, facing deficits, what will the people do, friends? Somehow, they will reduce their support for the AKP. When we look at the exchange rate, we will see the 42-53 cycle. Because foreign capital is burning, I say the engines of the AKP are burning. Therefore, no effect is emerging to decrease this from here. As you can predict, a pre-2028 election will be inevitable. But let me tell you, before that, we will recover the economy, let's buy some time, that perspective is now over. Because there are no reserves to spend, because there is no foreign capital. Therefore, all my brothers, prepare yourselves for inflation not to decrease, the inflationist environment will continue, the exchange rate will go around 42-53, in 2025 and 26, this will increase inflation, interest rates. Yes, they need to lower interest rates. But the interest here.

It will not decrease the rate to a point that will relax the business people because there will be no money to pump into reserves, so the exchange rate will need to stay at a certain level. Well, Şimşek's dismissal at the moment is difficult, but what will happen in 2026? What will Cevdet Hoca say when interest rate cuts come? That is very far away. Well, we will look at the dynamics there at that time, but I'm saying that calm and beautiful days are not really ahead. In order to consolidate the content in foreign policy, I think there are significant weaknesses in terms of control in the economy. Thank you for watching me. I offer my respects again.

ÇAKILACAK!!!

Avrasya Yatırım

The Impact of Political Decisions on the Economy

Major changes in the dollar, interest rates, and inflation are on the horizon, driven by political decisions.

85 billion, causing concern about the economy's stability.

1% of the population believes the economy is poorly managed, reflecting a potential shift in political dynamics.

Political Turmoil in Turkey and Its Potential Impact

Turkish politics are experiencing significant upheaval, with a notable erosion in AKP's voter support.

The government's financial decisions, including tax debt cancellations for partisan companies, are causing public dissatisfaction and contributing to a large budget deficit.

This political instability is likely to have a substantial impact on the dollar, interest rates, and inflation, potentially leading to a major balance of payments crisis.

The Impact of Economic Policies on Inflation and Exchange Rates

The implementation of Şimşek's economic plan has been hindered by various factors, including tax cuts benefiting the oligarchy and a lack of effective savings strategies.

The rising inflation and the need to lower interest rates are expected to bring the exchange rate issue to the forefront.

In response, there are plans to implement fiscal policy, lower interest rates, and stimulate the business world through consumer loans to address these challenges.

The AKP's Struggle with Inflation and the Exchange Rate

The President aims to control inflation and the exchange rate until 2026, with a promise of significant improvement by 2029 if he wins the election.

However, the party is currently struggling to find a permanent solution, facing challenges with inflation, unemployment, and a rising exchange rate.

The AKP's reliance on foreign capital and unfulfilled promises is further complicating the situation, impacting the party's ability to stabilize the economy.

The Impact of High Inflation and Economic Uncertainty

Inflation is projected to remain at a staggering 40-45%, with no sign of decrease until the Inflation Law is passed.

The heavy dependence on imports and facing deficits is expected to lead to reduced support for the AKP and a pre-2028 election.

The lack of reserves and foreign capital is likely to prolong the inflationist environment and keep the exchange rate between 42-53, causing challenges for the economy.