Cant believe USD/Lira rate was 1.5 in 2010, it is around 30 now.
This is how you end up with a dictator ruling the country with corruption.
Turkish central bank raises interest rate to 42.5% to combat high inflation
31–40 of 55 posts
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#32I thought interest was hudud? [0] /s Tbf, Erdogan's Islam excuse was bullshit. He kept interest rates low because his family has a controlling interest in construction companies in Turkiye. The company that built Istanbul Airport and runs IGA are run by relatives for example [1] and instigated their conflict with the UAE after Emaar "stole" the Bucharest (edit: Belgrade) Waterfront redevelopment from them [2] Turkiye…
Everyone knew that it was a BS argument.
In Islam there’s no “low interest is ok, high interest is not”, interest is not allowed period.
Not that that has stopped capitalism in Islamic countries, they just restructure it in a single fee and call it a “service fee”. Often done in a similar way that US lenders do with products targeted at riskier demographics: borrow $10k with a $2k fee, customer receives $8k.
And yes, lots and lots of nepotism in Erdoğan’s Türkiye.
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#33I thought interest was hudud? [0] /s Tbf, Erdogan's Islam excuse was bullshit. He kept interest rates low because his family has a controlling interest in construction companies in Turkiye. The company that built Istanbul Airport and runs IGA are run by relatives for example [1] and instigated their conflict with the UAE after Emaar "stole" the Bucharest (edit: Belgrade) Waterfront redevelopment from them [2] Turkiye…
Everyone knew that it was a BS argument. In Islam there’s no “low interest is ok, high interest is not”, interest is not allowed period. Not that that has stopped capitalism in Islamic countries, they just restructure it in a single fee and call it a “service fee”. Often done in a similar way that US lenders do with products targeted at riskier demographics: borrow $10k with a $2k fee, customer receives $8k. And yes,…
> Everyone knew that it was a BS argument
Yep! Just introducing the fact that Erdogan basically contorts Islam for personal political gain to people who don't realize (or forget) it. Plenty of foreigners have a weird conception of Turkiye.
> they just restructure it in a single fee and call it a “service fee”
Yep! One of my buddies who I studied with wrote their PhD thesis on the intricacies of "Islamic Finance", which is primarily used as a way to launder money out of Iran via Turkiye, Qatar, and Malaysia.
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#34Just a quick chart to put this into perspective: https://i.imgur.com/PfjCI82.png
Turkey's exchange rate with USD peaked at $0.85 on the dollar in '08. Bulgaria, which shares a border with Turkey, peaked at $0.80 the same year.
Now, 15 years later, Turkey is at $0.03 while Bulgaria holds $0.56.
Whew!
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#35Earlier quoted context omitted.
We don't call China "中国," so why are we calling Turkey "Turkiye"?
Czechia doesn't exist. It should be the Czech Republic! Macedonia will never be North Macedonia! Greece, NATO, and EU ascension be damned! Rename Eswatini to Swaziland! Zaire shall live on! /s Why the double standard for Turkiye? It's just pure racism.
> Why the double standard for Turkiye? It's just pure racism.
It’s Türkiye, not Turkiye: https://www.un.org/en/about-us/member-states/turkiye
I don’t appreciate being called racist.
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#36My layman understanding: raising interest rates is supposed to slow down businesses from growing as fast. The way businesses often respond is by downsizing the workforce. So then you get inflation that’s still high + high unemployment: not a great recipe. Does anyone with a background in economics have more insight into this?
Short answer: it's complicated. Longer answer: what you are interested in is called the “transmission mechanism”, and the reduced workforce (and also investment by businesses) is only a part of it. The main part of the transmission mechanism is consumption: when interest rates go up, saving becomes more attractive and people shop less, preferring to spend later. They also face lower asset prices (did you notice how a…
The transmission mechanism is not actually via raising interest rates in any real sense, it's by draining money from the economy - selling assets for money, and then retiring that money. This leaves economic actors with lower money balances than they wish to hold at the given level of nominal spending (price level × real activity) which in turn incents them to spend less in all kinds of ways. Which then leads to lower expectations of the future price level (as well as future real activity), which works to reel in the inflationary spiral.
Interest rates play little to no role in this specifically, and actually they are a lot more complicated because policy interest rates are set according to a liquidity effect (more money = lower rates) but natural or market rates move according to the Fisher effect (more money = more nominal spending in the future, thus higher interest rates!). Setting policy interest rates for any length of time thus always involves trying to achieve stability in an inerently unstable fashion, akin to balancing an inverted pendulum. It's not worth worrying too much about those.
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#37Earlier quoted context omitted.
We don't call China "中国," so why are we calling Turkey "Turkiye"?
Czechia doesn't exist. It should be the Czech Republic! Macedonia will never be North Macedonia! Greece, NATO, and EU ascension be damned! Rename Eswatini to Swaziland! Zaire shall live on! /s Why the double standard for Turkiye? It's just pure racism.
My keyboard doesn't have the special u
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#38I thought interest was hudud? [0] /s Tbf, Erdogan's Islam excuse was bullshit. He kept interest rates low because his family has a controlling interest in construction companies in Turkiye. The company that built Istanbul Airport and runs IGA are run by relatives for example [1] and instigated their conflict with the UAE after Emaar "stole" the Bucharest (edit: Belgrade) Waterfront redevelopment from them [2] Turkiye…
We don't call China "中国," so why are we calling Turkey "Turkiye"?
Mostly because they asked.
We don't have to rehash the whole reasons here, Wikipedia already spilled endless pixels arguing both viewpoints, with the expected culture war arguments and colorful comparisons that keep those discussions spicy
Do whatever you want. Let's just not derail every thread when you see someone on the opposite side, we know how that ends
Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#39I thought interest was hudud? [0] /s Tbf, Erdogan's Islam excuse was bullshit. He kept interest rates low because his family has a controlling interest in construction companies in Turkiye. The company that built Istanbul Airport and runs IGA are run by relatives for example [1] and instigated their conflict with the UAE after Emaar "stole" the Bucharest (edit: Belgrade) Waterfront redevelopment from them [2] Turkiye…
We don't call China "中国," so why are we calling Turkey "Turkiye"?
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Re: Turkish central bank raises interest rate to 42.5% to combat high inflation
#40Just a quick chart to put this into perspective: https://i.imgur.com/PfjCI82.png Turkey's exchange rate with USD peaked at $0.85 on the dollar in '08. Bulgaria, which shares a border with Turkey, peaked at $0.80 the same year. Now, 15 years later, Turkey is at $0.03 while Bulgaria holds $0.56. Whew!
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