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$120 bn made to ‘evaporate’ to keep dollar rate below TL 7, former Turkish economy minister says

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Ali Babacan, Turkey’s former economy minister who launched a new party this year to challenge President Tayyip Erdoğan, said on Wednesday that the government’s methods of keeping the dollar rate low had worsened the country’s economy.

“Monetary policy is wrong since the central bank is not independent. They made $120 billion in reserves evaporate just to keep the dollar exchange rate below 7 Turkish lira. Things are only going to get worse if they continue like this,” Babacan said during a live broadcast on Fox TV.

Babacan also claimed that the government tampers with data to mislead the public.

“The general mood is important in the economy; nevertheless, it should be based on fact. The Turkish Statistical Institute [TurkStat] announced a yearly inflation rate of 12 percent. Inflation is much higher than the figures announced by TurkStat. Inflation for merchants is around 30 to 50 percent. Why should investors invest if they feel the state is not telling the truth or that TurkStat doesn’t reveal the actual inflation figures?” he said.

Babacan claimed that doctoring statistical figures is common practice not only in the economy but in every field, even in COVID-19 figures.

“Neither ruling party wants to hear the truth. Attacks are launched against people who tell the truth. No one trusts the statistics. There are more coronavirus patients in Ankara than the minister of health announced for the whole of Turkey. It’s wrong to present altered data. You should present the true picture of COVID-19 to the people so they will be more careful and more cautious.”

Babacan served as Turkey’s deputy prime minister for economic and financial affairs between 2009 and 2015.

He parted ways with Erdoğan and founded the Democracy and Progress Party (DEVA) in March.

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