Lira plummets as Turkey predicts new bread revolution

Le programme économique actuel du gouvernement turc consiste à abaisser les taux d'intérêt afin de renforcer l'économie du pays. En conséquence, la valeur de sa monnaie, la livre turque, a subi ce qui est considéré comme la plus grande chute de son histoire. 

At the same time, the country has shown signs of a major bread crisis, whose prices have changed for the third time this month. 

The effects of this crisis could even increase the country's poverty level, as well as give rise to new mass protests, which according to observers could be called the "bread revolution". 

The price of the Turkish currency fell to 12.25 pounds to the dollar, which is a percentage of 2.9 percent, after being at the level of 10 pounds for two months, compared to 6 pounds to the dollar a year earlier.  

However, compared to the U.S. dollar, the latter has managed to more than double in value against the lira this year, greatly shaking the Turkish market.

According to an official Reuters poll, the Central Bank made interest rate cuts to 14 percent, with the benchmark at 100 basis points, despite inflation rising to over 21 percent. 

The Central Bank has also cut its interest rate to align with Turkish President Recep Tayyip Erdogan's plan to put exports and lending first, dropping by 400 basis points to 15 percent since September. 

Because of this, various economists and lawmakers have shown their disapproval regarding this policy. 

"There is an experiment going on and Erdogan is leading this experiment," Guldem Atabay, an economist at Istanbul Analytics, reported. 

"Interest rates will be cut as much as possible," the Turkish economist added.

According to the information coming from the Central Bank, inflationary pressure would not be constant, but temporary, as well as vital to multiply economic growth and thus get the balance in balance by itself.  

As a consequence of this financial crisis, contrary to that given in the country, new effects arose that began to put pressure on the Turks, which can be seen in the long queues in front of bakeries in Istanbul, the capital of Turkey, with the aim of acquiring the so-called "popular bread", supported by the city authorities.  

As it is an essential ingredient for Turkish cuisine, the government began to put pressure on bakeries to sell traditional white bread at a price lower than the full cost of production, forcing supermarkets and grocery stores to sell it at the same price.  

However, as a result, some bakeries have been forced to discontinue their operations due to the increase in the prices of flour, yeast, electricity, and gas, among others.   

Likewise, if the corresponding authorities do not solve this problem and begin to implement measures to guarantee this product at a reasonable price in the different markets, observers consider that it will lead to massive protests. 

Last Sunday, several protests took place in the cities of Ankara and Istanbul, in which the demonstrators demanded the exit of the government due to the fall in economic and living conditions, the deterioration of the value of the lira and the increase in the inflation rate, which have increased the level of poverty in the country.  

According to local media, there are 14 million people living at the poverty line in the country who receive a minimum wage, as well as 7,587,123 people whose monthly income is one third of the minimum wage.  

In order to appease the population, the Turkish president announced last Thursday that he would raise the minimum wage in the country by approximately 50 percent in 2022, which is an increase of $275.44, as well as promising that this situation would end soon.