Interest Rate Hike & more– 26th Sep 2023

Merhaba from Keswick Village! This is the Rorshok Turkey Update from the 26th of September twenty twenty-three A quick summary of what's going down in Turkey.

Let’s kick off this week’s edition with some news on the economy…

Just like last month, the Central Bank increased the policy interest rate. This time, the bank increased it from 25% to 30%.

Speaking of the Central Bank…

Recall that the bank was planning to phase out of the FX-protected deposit scheme. In this scheme, investors deposit Turkish Liras into a bank account that is attached to the US dollar. If the value of the US Dollar increases, the value of their money also increases, even if it’s in Turkish Liras. There are also monthly interest earnings on top of this. So, it was a very profitable deal for the investors.

With this scheme, the government aimed to encourage investors to exchange foreign currency for the Turkish Lira, so as to create a demand for it in the market. Theoretically, it did bring more Turkish Liras into the market, but it also cost the government a lot of money because the US Dollar didn’t lose any value as they hoped. The scheme became too expensive for the bank. It had to pay more Turkish Liras because of the dollar’s value and the interest earnings.

Because of this, on Monday the 25th, the bank announced that it removed the minimum interest rate for the accounts. It used to be fixed at the policy interest rate. Now, banks can go lower than the policy interest rate. Through this move, the Central Bank aims to make Lira deposit accounts more desirable, as they may have higher interest rates than the FX-deposits.

Let’s move on to politics…

On Wednesday the 20th, a court sentenced a seventeen-year-old high school student to prison for a video that went viral on social media. In the video, he’s holding a picture of Atatürk, the founder of the country, and making obscene gestures at it. He is now facing charges. For instance, the court charged him with publicly insulting the memory of Atatürk. According to the law, insulting Atatürk is an offense punishable by up to three years of imprisonment.

You can check the video in the show notes.

After his arrest made it to the news, Kılıçdaroğlu, the head of the main opposition, the Republican People’s Party or CHP, criticized the move in a series of tweets. He said that the ruling party, the Justice and Development Party, or AKP, was the reason behind the public hatred of Atatürk. He said that the government “trained, deceived and brainwashed” people into disliking Atatürk, and cannot punish a child for acting in this way. He further said that the “palace”, meaning Erdoğan’s government, made the arrest to appeal to the people in the country who love Atatürk, and that he was just stealing that teenager’s future.

In unrelated news…

On Tuesday the 19th, the Birgün Newspaper reported that the Religious Affairs Directorate held a hundred thousand US Dollar tender to print a gold-gilded Quran that changes color when heated, adding that the Directorate never holds back on spending money on luxury. However, on Thursday the 21st, the Directorate said in a press release that the Newspaper’s reporting wasn’t true. It stated that the name of the print color was gold, and that they were not going to use actual gold.

Let’s talk about the drought in İstanbul…

Recall that the city governorate has been asking people to save water for some time, saying that the city dams’ water levels are dropping rapidly. However, on Thursday the 21st, in a symposium, Ekrem İmamoğlu, the mayor of İstanbul, agreed that the water levels were low, currently below 25%. However, he said that the city has enough water for the remainder of this year. Hopefully, rainfall will increase before the drought reaches a vital point.

Next up, a disappointing story …

So, back in twenty twenty, Musa Orhan, a then-seargent, reportedly kidnapped and raped an eighteen-year-old girl for twenty days. The girl shot herself after the incident and left a suicide note where she described what happened.

Following the girl’s death, the police arrested Orhan, but released him from custody only a week later. A year later, a court sentenced him to ten years in prison, but he wasn’t incarcerated. He was instead put under judiciary control and was banned from leaving the country.

The incident caused great public outrage, and many celebrities commented on the matter, slamming Orhan. Ezgi Mola and Zeynep Farah Abdullah, both actresses, got a fined for insulting him on social media. Over this, Abdullah tweeted that Orhan was trying to make his living through compensations he gets from “insult” cases and called him a “hungry dog”. Now, Abdullah is facing another lawsuit regarding the tweet and the prosecutor demanded a prison sentence of up to two years.

On to some news on international relations…

Last week, Erdoğan attended the United Nations General Assembly in New York. On Thursday the 21st, he commented on the color scheme of the UN’s meeting hall and said that the ‘LGBT colors’ bothered him, referring to the colors on the stairs and walls. However, some UN diplomats said that Erdoğan might be confusing the rainbow colors with the seventeen colors associated with the UN’s Sustainable Development Goals project.

Speaking of the LGBT community…

Hacettepe University rectorate shut down its decade-old LGBT student club, citing that the club didn’t hold enough events. However, reportedly, the rectorate banned some of its events, and the university held lectures online for the last semester because of the devastating twin earthquakes earlier this year. The club said that it held online events, but the rectorate officially shut down the club on Thursday the 21st.

Some unfortunate news…

On Monday the 25th, an explosion took place at the Defense Industries Research and Development Institute of the state-run Scientific and Technological Research Council. One person died in the explosion. The initial report stated that it was a chemical reaction where the institute temporarily kept the chemical waste before getting rid of it and that it was likely the cause of the blast. However, the city governor said that they started the necessary investigation into the matter.

Let’s end the episode on a better note…

In a remarkable victory, the Turkish national Women’s Volleyball team won all of its seven matches in the twenty twenty-four Olympic Qualifiers. The Qualifier matches also served as the twenty twenty-three World Cup, so the team also won the World Cup. It has now earned its spot in the twenty twenty-four Paris Olympics. The country is extremely proud of the girls and currently, there are a lot of commercials on TV hyping up the team. The most common one holds the slogan “We are the country of volleyball!.”

That’s it for this week! Thanks for joining us!

This Turkey Rorshok Update is one of the country-specific podcasts we do.

But we've been experimenting with other topics, and we have a new show about the Arctic, where we update you on everything going on North of the Arctic Circle. The Arctic Update is the third of the new series, along with the Ocean and Multilateral Updates.

You can look for them in your podcast listening app of choice or follow the links in the show notes! Tell your friends!

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