Professor Steve Hanke speaks to Ahval on Turkey's currency crisis
Turkey’s inflation rate has reached 101 percent, according to calculations based on purchasing power parity, and the government lacks the credibility to avert a financial crisis because it cannot control price increases and a collapse in the lira, said Professor Steve Hanke, an applied economist who is known as the father of currency boards.
“If they’re not going to stabilise the lira, the game is over,” Hanke, who works at the John Hopkins University in Baltimore, told Ahval contributors Guldem Atabay Sanli and Mark Bentley on Ahval TV. "You can’t formulate intelligently any kind of economic policies or reforms if everything is unstable. If you’re in the middle of a currency crisis you have to stop the currency.”
Turkey’s lira has slumped more than 40 percent against the dollar this year, including a decline of 25 percent in August alone. The government is not taking measures called for by investors and economists, which include big increases in interest rates and urgent, decisive measures to tighten the budget and help indebted Turkish firms.