Turks struggle to survive, find ways to economize
While the Turkish lira plunged and the inflation rate edged up to 21%, Turks do not know how to adapt.
As the Turkish currency reaches almost 50% of its value against the dollar this year, Turks who do not have any foreign currency savings or any gold to sell are trying hard to find ways to economize, in order to survive this economic crisis, such as refraining to buy meat anymore or turning to government-subsidized bread stands for sustenance, as reported by The Guardian.
“I used to look at the price of gold once a week. Now I look roughly 50 times a day,” says the owner of a jewelry shop, who advises citizens to wait until perhaps the price stabilizes.
While the Turkish lira plunged, the inflation rate edged up to 21%. Turkish President Recep Tayyip Erdogan’s response was a series of cuts to the base interest rate, as a way to defy economic convention.
This approach was framed by the president as an “economic war of independence” that would stimulate the economy, boost exports, and create jobs; however, citizens are in a cleft stick amid the fluctuating prices of gold, and everything else. They do not know whether to buy or sell, or none.
Seda, a Turkish citizen, wants to sell her gold to buy a house. “My husband said we should get the gold assessed. We’re undecided about what to do because the price of everything is fluctuating,” she says. “We can’t get a loan to pay for it as we can’t trust what will happen with the currency. I don’t know what to do.”
Erdogan insists that his “new economic model” will turn out well. “We know what we are doing. We know how to do it. We know where we are going. We know what we will achieve,” he said earlier this month and repeatedly encouraged Turks to take their savings into banks.
But along these encouraging words, all the Turks are witnessing is a steep slide in the lira's value and rising inflation.
On one hand, the lira dropped 8% again on Friday, December 17, and the central bank announced its intervention to prop up the currency for the fifth time in a month. On another, Turkey’s stock market, the Borsa, was twice forced to stop trading to avoid further losses.
Selva Demiralp, a professor of economics at Koç University and a former economist at the US Federal Reserve says, “Foreign exchange interventions might continue but they are neither a good strategy nor sustainable,” adding, “In Turkey, the root cause of the financial turmoil is the loose monetary policy itself. So unless the central bank switches to a tighter stance, demand for dollars will continue.”
In light of the high living costs, the devaluation of the lira, and worsening livelihood, the city of Diyar Bakr witnessed today the protests of thousands of people against the government's economic policies and inflation, demanding better conditions for workers.