The writer is president of Queens’ College, Cambridge, and an adviser to Allianz and Gramercy
Having tried to defy internal and external economic logic by repeatedly cutting interest rates, Turkey opted this week for a new set of unorthodox measures to stabilise its currency.
Whether the authorities are more successful ultimately this time around boils down to a simple question: will Turkish households and companies view this “circuit breaker” as a bridge to a more comprehensive set of measures that address the underlying drivers of economic and financial instability or, instead, as a destination that soon proves inherently unstable?
It is hard to put into words how disorderly the Turkish currency markets had become by Monday afternoon. The lira had weakened to beyond TL18 per US dollar, constituting a halving of its value in just two months.
The rate of depreciation was gathering momentum, as was the chaotic nature of the trading even though the central bank was intervening, thereby depleting further its international reserves.
It was just a matter of time until all this also led to another leg-up in an inflation rate already above 20 per cent. A growing part of the population were opting to protect their savings by changing lira deposits into dollars and other hard currency (what economists refer to as “dollarisation”).
The proximate cause of all this was the 5 percentage points cut in domestic policy rates since September at a time when both internal and external conditions called for a hike. Inflation was rising, the currency was under pressure and global monetary policy conditions were starting to tighten, especially in the emerging world.
Desperate for a circuit breaker, the authorities opted this week for a set of complex measures that are best described as an interest rate equalisation mechanism with guarantees to maintain the real value of lira deposits when measured in hard currency.
In addition to lowering the incentive for further dollarisation, this approach appears to have three side-benefits of interest to the Turkish authorities. First, it avoids the impact of a partial and implicit interest rate hike on the rest of the economy. Second, because the guarantee applies to 3-12-month deposits, it encourages the lengthening of the average duration of such deposits. And third, it helps alleviate heavy and mounting inflationary pressures.
All this at a time when, prior to the announcement, the currency was trading in “overshoot” territory according to most economic measures.
These advantages come with considerable risks. The mechanism exposes the fiscal accounts/central bank to a large financing burden unless other measures are taken to control inflation and limit renewed pressures on the currency away from dollarisation. If the mechanism fails, it will further undermine the credibility of policymakers, making it harder for the next set of measures to take hold quickly even if they are comprehensive and appropriate.
It is the still-large set of Turkish lira depositors who, within weeks, will determine the outcome. If they trust the policy response and worry little about the potential collateral damage, they will encourage others to buy the domestic currency, domestic and external. The government can help this process by credibly signalling that the latest measures are not an end in themselves but rather a bridge to a more comprehensive set of policies.
This would include explicit rate hikes by the central bank which, at this point, are still necessary but no longer sufficient. Turkey will also need to seek other internal anchors, such as a tightening of fiscal policy, and perhaps also external ones, such as agreement on an IMF programme that provides both funding and external validations.
All this will need to be done while avoiding the understandable temptation of capital controls that would undermine a historically powerful, and still impactful open growth model that, both economically and financially, exploits Turkey’s many “competitive edges”.
Through a new set of unorthodox measures, Turkey has bought itself artificial stability. This is unlikely to translate into genuine stability unless Turkish citizens are convinced that their currency crisis has truly passed.
This only happens if the government quickly shifts to a more comprehensive — and, yes, more orthodox — policy approach. Failing to do this would further erode the country’s strong economic attributes. After all, there are limits to continuously defying the laws of both economics and finance.
order levaquin pills levofloxacin 250mg over the counter
avodart uk ondansetron 8mg cheap buy ondansetron
purchase spironolactone sale spironolactone 100mg price fluconazole 200mg for sale
ampicillin 250mg cost trimethoprim over the counter cheap erythromycin
fildena 50mg uk robaxin 500mg price order methocarbamol online
order suhagra 50mg generic oral aurogra 50mg cost estradiol 2mg
order lamotrigine 200mg without prescription order retin cream generic oral retin gel
buy tadalafil 20mg sale avana online buy order diclofenac
isotretinoin 10mg price isotretinoin buy online purchase azithromycin without prescription
buy indocin 50mg without prescription buy generic amoxicillin 250mg trimox brand
buy tadalafil 20mg pill Generic viagra in canada purchase sildenafil for sale
brand anastrozole 1mg viagra price comparisons sildenafil 50mg generic
pharmacie en ligne cialis 40mg tadalafil 40mg sans ordonnance en pharmacie sildenafil comprimГ©
buy deltasone 5mg generic order prednisone 5mg pills buy sildenafil 50mg without prescription
tadalafil ohne rezept sildenafil 100mg kaufen für männer viagra kaufen generika
generic ramipril 10mg irbesartan for sale online cost azelastine 10ml
order clonidine 0.1 mg for sale clonidine 0.1 mg us spiriva for sale online
buspirone drug phenytoin online order buy ditropan 2.5mg sale
hytrin 5mg usa buy leflunomide generic buy sulfasalazine 500 mg generic
cheap alendronate 35mg alendronate 70mg pills cost famotidine 40mg
benicar 10mg usa acetazolamide drug buy diamox 250 mg generic
order generic prograf order ropinirole online ursodiol buy online
isosorbide uk purchase telmisartan pill purchase telmisartan online cheap
buy zyban 150mg pill bupropion 150 mg pill quetiapine 100mg ca
cost molnupiravir order generic lansoprazole 30mg lansoprazole tablet
buy sertraline generic order lexapro 10mg generic cheap sildenafil generic
order imuran 100 mcg for sale viagra 50 mg sildenafil 100mg brand
buy cialis 20mg sale buy phenazopyridine 200mg symmetrel 100mg usa
naltrexone 50 mg uk generic revia order abilify sale
avlosulfon cost avlosulfon 100 mg canada perindopril 4mg sale
buy medroxyprogesterone pill purchase cyproheptadine generic purchase periactin generic
provigil 100mg cheap buy stromectol 6mg pill stromectol without prescription
cheap fluvoxamine 100mg ketoconazole 200 mg drug order glipizide pills
isotretinoin 10mg cost buy prednisone 20mg generic order deltasone 5mg for sale
nootropil online order purchase viagra online us viagra
order generic azithromycin order prednisolone 20mg for sale order gabapentin 800mg online cheap
tadalafil 40mg oral cheap viagra sildenafil for sale online
furosemide 100mg us doxycycline price buy hydroxychloroquine online
cialis 20mg pills order cialis 40mg for sale clomipramine for sale
chloroquine 250mg without prescription baricitinib price buy baricitinib 2mg online cheap
buy itraconazole generic buy generic tindamax 300mg tinidazole brand
cheap glucophage oral glycomet 500mg buy generic cialis 5mg
order olanzapine 10mg generic purchase valsartan for sale order diovan 80mg
norvasc online cialis 5mg drug cialis tablet
buy clozapine 50mg without prescription purchase dexamethasone for sale buy decadron for sale
generic viagra viagra 50mg pills for men order lisinopril 10mg pills
prilosec cost my father essay writing casino online blackjack
zyvox 600 mg ca roulette online blackjack vegas free online games
brand metoprolol 100mg metoprolol usa vardenafil 20mg us
academia writers no deposit bonus codes real money slots
buy generic levitra methylprednisolone buy online methylprednisolone oral
top essay writers hire essay writer buy viagra sale
order clomid 50mg online cheap buy albuterol pills betfair casino online
buy tadalafil 10mg generic viagra next day cheap sildenafil 100mg
aristocort 4mg cost order claritin online order generic clarinex 5mg
dapoxetine 60mg oral buy cytotec 200mcg online cheap synthroid 100mcg cost
order tadalafil 20mg online cheap tadalafil 5mg usa viagra cost
order orlistat 60mg online cheap order xenical 120mg pills zovirax 400mg cost
buy tadalafil 40mg generic cost tadalafil 5mg plavix 75mg pills
buy zyloprim 300mg for sale ezetimibe 10mg pills buy ezetimibe 10mg pill
buy methotrexate sale buy methotrexate 2.5mg for sale order reglan 20mg online cheap
motilium online order buy generic flexeril cyclobenzaprine generic
brand losartan nexium 40mg for sale buy topiramate pills
order ozobax online purchase toradol toradol 10mg for sale
imitrex medication generic sumatriptan 25mg dutasteride us
brand gloperba play slots online online casino usa
buy zantac 150mg sale buy celebrex without prescription celebrex 200mg price
best online casino for money online casino with free signup bonus real money usa san manuel casino online
oral flomax 0.4mg zofran 4mg cost order spironolactone
tadalafil 10mg sale ciprofloxacin 500mg tablet generic ciprofloxacin 1000mg
buy zocor online cheap propecia 5mg uk finasteride buy online
metronidazole usa augmentin cost bactrim online
order fluconazole 100mg generic order diflucan 200mg without prescription viagra 50 mg
cephalexin without prescription cleocin drug brand erythromycin 500mg
cialis sales cialis medication purchase viagra pill
buy viagra 100mg pill cialis 5mg sale buy generic tadalafil 40mg
cost ceftin brand cefuroxime 500mg purchase methocarbamol generic
trazodone 50mg tablet aurogra 100mg brand buy aurogra generic
write essays for money stromectol 6mg generic ivermectin 6mg tablet
sildalis online buy buy generic lamictal 50mg lamictal 50mg sale
cheap prednisone 20mg amoxicillin cheap amoxil 250mg price
brand viagra viagra sildenafil 100mg tadalafil drug
online gambling for real money ed pills comparison order tadalafil 20mg
zithromax over the counter buy prednisolone 40mg pill gabapentin 100mg generic
casino real money play roulette for free purchase provigil online cheap
furosemide 40mg price hydroxychloroquine generic plaquenil 400mg oral
deltasone 10mg ca purchase prazosin pills buy vermox for sale
buy sildenafil 50mg sale rhinocort over the counter order rhinocort online
order generic retin gel buy tadalafil cheap avana 100mg
cheap tadalafil indomethacin 50mg tablet buy indocin 50mg online
lamisil 250mg cost purchase trimox generic order trimox generic
purchase naprosyn generic brand prevacid 30mg order generic lansoprazole 30mg
buy biaxin 250mg online meclizine 25 mg usa meclizine 25mg tablet
albuterol pills pantoprazole 40mg sale order cipro 500mg online cheap
order spiriva 9mcg spiriva 9mcg us brand hytrin
singulair over the counter viagra 50mg cheap purchase sildenafil online cheap
order pioglitazone order viagra 50mg viagra fast shipping
female cialis pill Mail order cialis buy tadalafil 40mg online cheap
buy generic tadalafil 5mg casino games online real money online blackjack game
online blackjack live dealer hollywood casino online real money play roulette online real money
poker sites online casino real money us casino free spins no deposit
free online blackjack no download online canadian pharmacy store good academic writing
order ramipril pill altace 5mg brand order etoricoxib generic
Somebody essentially lend a hand to make seriously articles I might state. This is the first time I frequented your web page and so far? I surprised with the analysis you made to make this actual submit amazing. Wonderful task!
Fantastic website.온라인카지노
A lot of useful info here. I am sending it to a few buddies ans also sharing in delicious. And obviously, thank you for your effort!
This is a great tip especially to those fresh to the blogosphere. Brief but very accurate info… Thank you for sharing this one. A must read post!
스포츠중계Pretty! This was an incredibly wonderful article. Thank you for supplying these details.
doxycycline 100mg cheap buy doxycycline 100mg order cleocin 150mg without prescription
my mother essay writing where can i buy an essay sulfasalazine over the counter
mesalamine pill buy azelastine 10ml without prescription buy avapro sale
buy olmesartan 20mg pill buy benicar 10mg divalproex for sale online
acetazolamide online buy buy isosorbide for sale imuran drug
order clobetasol generic temovate online order buy cordarone for sale
order lanoxin 250 mg for sale digoxin price buy molnunat 200 mg pill
earch our drug database. Read here.
https://viagrapillsild.com/# dapoxetine vs viagra
Medscape Drugs & Diseases. Actual trends of drug.
coreg price order ditropan 5mg online cheap brand amitriptyline 50mg
purchase amoxicillin sale order amoxicillin 500mg online cheap stromectol ivermectin
Some are medicines that help people when doctors prescribe. Drug information.
tadalafil cheapest price
Comprehensive side effect and adverse reaction information. Prescription Drug Information, Interactions & Side.
purchase dapoxetine for sale priligy medication buy motilium 10mg pills
pamelor 25mg us paroxetine 20mg cost paxil over the counter
indocin capsule cost cenforce 100mg buy cenforce pills
Generic Name. Some are medicines that help people when doctors prescribe.
https://tadalafil1st.online/# tadalafil tablets 20 mg india
Read here. Some are medicines that help people when doctors prescribe.
buy generic famotidine 40mg remeron 15mg without prescription mirtazapine 15mg drug
doxycycline drug medrol 16mg for sale medrol usa
buy generic ropinirole 1mg buy labetalol 100 mg generic labetalol 100 mg pill
buy fenofibrate 160mg generic sildenafil 50mg for sale buy sildenafil online
esomeprazole pills order esomeprazole 20mg sale cost furosemide 100mg
cialis 10mg ca cheap viagra 100mg cheap viagra sale
minocycline 50mg cheap cheap neurontin 100mg order terazosin sale
order generic cialis 10mg viagra free non prescription erection pills
buy metformin generic tamoxifen 10mg uk order nolvadex pills
buy generic modafinil order stromectol 12mg pills purchase phenergan
clomiphene 100mg pills clomid 50mg tablet order prednisolone
buy deltasone 10mg pill amoxicillin 500mg usa amoxil 250mg cheap
oral accutane 40mg deltasone 10mg generic ampicillin 500mg tablet
order fildena pills order fildena online order propecia 1mg for sale
ivermectin 3mg tabs buy ed pills canada buy deltasone 20mg
buy generic ondansetron 4mg cheap amoxicillin for sale buy generic bactrim 480mg
isotretinoin pills order azithromycin generic buy generic azithromycin
order albuterol 4mg inhaler augmentin 1000mg pills buy augmentin 625mg pills
order modafinil 200mg sale modafinil 200mg ca order metoprolol 100mg online cheap
prednisolone uk order lasix 40mg online cheap oral lasix
buy avodart 0.5mg for sale xenical online buy generic orlistat 120mg
vibra-tabs ca buy acyclovir online cheap order zovirax 800mg generic
order azathioprine sale order telmisartan pill buy naproxen 500mg without prescription
order omnicef 300 mg for sale buy omnicef 300mg for sale order pantoprazole 20mg sale
То, что влияет на детей в реальности, они стремятся
воплотить в игре, становясь активными участниками, способными влиять
на окружающую действительность.
Как продавать онлайн – Бизнес-секреты
simvastatin 20mg brand simvastatin 10mg cost order sildalis sale
dapsone 100mg tablet buy tenormin online buy cheap tenormin
buy uroxatral 10 mg online alfuzosin 10mg canada diltiazem without prescription
brand sildenafil approved tadalafil real cialis pharmacy prescription