Turks skeptical of Erdoğan’s reform promise, continue to invest in foreign currencies

K. Murat Yıldız / Duvar English

Turks remain skeptical of Erdoğan’s promises of structural reform and continue to invest in foreign currencies. Over the two weeks following the president’s statement, Turks were net buyers of 3.9 billion USD, according to Turkish Central Bank data.

Following the resignation of Finance Minister Berat Albayrak and the appointment of a new raft of monetary policy makers, President Recep Tayyip Erdoğan has promised a new era of economic and judicial reforms.
Albayrak, who is also Erdogan’s son-in-law, stood down last month following Erdogan’s sacking of Central Bank Governor Murat Uysal.

Following their departure, Naci Ağbal was brought in to head the Central Bank while Lütfi Elvan, a former deputy prime minister, replaced Albayrak as finance minister.

Erdoğan followed up these new appointments with a pledge on Nov. 13 to reform Turkey’s economy, justice system, and democracy.

Although many in Turkey and abroad are still skeptical about Erdoğan’s promises, foreign investors have reacted positively to this shift in economic management and the early shift in decision making, especially raising interest rates from 10.25 percent to 15 percent.

According to Turkish Central Bank data, foreign investors were net buyers of stocks worth 614 million USD and bonds valued at 294 million USD during the third week of November alone.

Experts estimate that around 5 billion USD was injected by foreign investors into Turkish markets following these recent developments.
Earlier this week, Simone Kaslowski, head of the Turkish Industry and Business Association (TÜSİAD), underlined the importance of "the rule of law and a reliable judicial system that works quickly and fairly” to ensure “the flow of investment capital into the country."

“It takes years to establish trust among foreign investors, but very short time to destroy it,” former Economy Minister Ufuk Söylemez told Duvar English.Söylemez continued his analysis of the situation by saying, “‘On the local level, Turkish people didn’t buy the recent changes. Changing the minister wasn’t enough for them. The sweet talk from the president didn’t convince them either. Therefore, as of today we see that the USD is back at 7.83 TL and the EURO to 9.5 TL levels."

According to Söylemez, who remains pessimistic that President Erdoğan would change course, Turkish government needs to stop seeking solutions outside of the proven and globally accepted economic principles. 

"It needs to take the right steps to convince foreign investors and its citizens. The government needs to leave aside ideological obsessions. Almost every six months the government announces a new economic reform package. The problems are right in front of our eyes. An average person can identify them. You don’t need to be a rocket scientist in order to figure it out."