“Do you really believe what you’re saying?” ex-bank chief asks Albayrak

Former Turkish Central Bank Governor Durmus Yilmaz asked the country’s minister in charge of the economy whether he really believed his own rhetoric, pointing to his failure to take responsibility for recent financial turmoil and enact serious reforms.

Yilmaz said the government’s assertion that Turkey’s economic problems were the fault of external forces had no bearing on reality, according to Sozcu newspaper.

“If you believe what you’re saying, then we’re in an even more terrible place than we thought,” Yilmaz told Treasury and Finance Minister Berat Albayrak following a speech by the minister to parliament’s planning and budget committee on Thursday.

Yilmaz went on to criticise Albayrak’s decision to halt or reduce sales of Turkish lira bonds, saying the policy harked back to a financial crisis in 1994, when then Prime Minister Tansu Ciller applied the same measures only to see interest rates in the country surge.

“Playing with treasury auctions to bring down interest rates is playing with fire. They tried this in 1994 and it resulted in a crisis,” Yilmaz said. “We saw astronomical interest rates of 300-400 percent just by wanting to bring rates down by a few percentage points.

“It’s extremely risky to create interest rates that have no bearing on the realities in the market through cancelling auctions and through bids by public banks.”