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Thousands take to streets in Turkey over rising inflation, currency freefall

Monday, 13 December 2021 9:28 AM [ Last Update: Monday, 13 December 2021 10:08 AM ]

Turkish protesters take part in a rally organized by DISK (Confederation of Revolutionary Trade Unions) in Istanbul, on Dec. 12, 2021. (Photo by Athina984)

Thousands of people have taken to the streets of Istanbul to protest against the Turkish government's failed economic policies amid rising inflation and depreciating currency.

Protesters took part in the rally in Istanbul, Turkey's most populous city as well as its cultural and financial hub, in the first such major demonstration.

Critics blame the Recep Tayyip Erdogan government's regressive economic policies for the freefall of the Turkish currency lira and an astonishing rise in inflation.

They question the official figures, accusing the National Bureau of Statistics (TUIK) of downplaying the poor health of the country’s economy.

Real annual inflation, according to a study by the ENAG (Inflation Research Group), which is made up of independent economists, is closer to 58 percent.

Turkish president calls on Turks to trust his economic plan

Turkish President Tayyip Erdogan has called on Turks to trust his government

The lira has weakened 30 percent against the US dollar since late October as the central bank cut interest rates amid inflation that S&P Global Ratings describes as “high and rising.”

Current easing and significant depreciation will pressure inflation, which year-on-year may reach as much as 30 percent in early 2022, and will swell the deficit, according to the agency.

"We are getting poorer every day and more, but everything is going well according to the gentlemen who run the country. We say that we can no longer meet our needs," Arzu Tserkezoglou, president of the Confederation of Revolutionary Trade Unions, told protesters during Sunday’s rally.

"Do not make fun of the intelligence of the working class,” he said, addressing the government.

A screen shows exchange rates at a shop near Taksim Square in Istanbul on October 25, 2021, as the lira plunged to record lows. (Photo by AFP)

The Turkish Central Bank began its interventions on Saturday and the currency has since approached 13.9 three times before abruptly rallying, suggesting authorities are unwilling to let it blow through 14.

Economists, however, warn that the Central Bank cannot properly defend the lira given its depleted reserves.

Some blame the crisis on Erdogan’s decision to lower interest rates. Ankara, however, blames what it calls foreign plots against Turkey to weaken its economy and “bring the country to its knees.”

Erdogan has replaced a series of Central Bank chiefs and finance ministers in recent years, in a bid to control the monetary policy. The decision, many believe, has failed to pay dividends.

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