News & Politics

Turkish President Erdogan Blames Fall of Lira on 'Interest Rate Lobby'

Turkey's President Recep Tayyip Erdogan addresses a rally in the courtyard of historical Haci Bayram Mosque in Ankara, Turkey, Tuesday, May 26, 2015. Earlier in the day, Erdogan showed a copy of Islam's holy book, Quran, in Kurdish language during a ceremony in Hakkari at the border with Iraq. Turkish opposition parties accuse Erdogan of exploiting religious values and symbols to favor the ruling Justice and Development Party ahead of the June 7 general elections. Erdogan has held Kurdish-language copies of the Quran during several rallies in the country’s mainly Kurdish, eastern and southeastern provinces. Opposition parties say his move is in breach of Turkish laws banning the use of religion in politics.(AP Photo/Burhan Ozbilici)

Turkish President Recep Tayyip Erdogan holds the “interest rate lobby” responsible for the fall of the Turkish lira, which is losing ground against the dollar and the euro on a daily basis.

“My nation should not give credence to the interest rate lobby, because they are in a rush for something. Its [the interest rate lobby’s] incomes are unearned from people’s money and deposits, and then it brags about what it has done,” Erdoğan said.

Around seven years ago, I remember exchanging 1 euro for 1.70 lira. It’s now 1 euro for 3.67 lira. That obviously means life has become much cheaper for me when I’m in Turkey, but it also means that life for the average Turk has become much more expensive. After all, Turkey’s economy is highly dependent on imported goods.

To Erdogan, this must be a sign of some kind of hostility from unspecified (but highly dangerous) outsiders — namely, people who “hate Turkey” and want to destroy it. Why they want to do such a thing is anyone’s guess, but apparently some of Erdogan’s supporters feel the same.

In recent days, many Turks have decided to convert their dollars into liras. That obviously makes Erdogan one happy camper, but he does warn his people that they have to step up their efforts if they really want to have an impact:

I appreciate my people’s choice of converting their foreign currency into liras. But this is insufficient. I think people should stress this issue more.

Of course, what would really help the lira would be an end to the emergency rule Erdogan declared shortly after the failed coup of July 15, and less authoritarian policies. Liberal democracies tend to have strong, healthy economies. Contrast this with the generally weak economies of dictatorships and states ruled by highly authoritarian governments.

To save the Turkish lira, Erdogan has to set the economy and Turkey’s political system free. If he doesn’t, the lira could continue to fall faster than “g.