Many Turks Can’t Afford Bread, and Bakers Can’t Afford to Make It
https://www.nytimes.com/2021/12/15/worl ... rices.html
Turks are grappling with soaring inflation, watching prices rise daily as the lira has plunged against the dollar and their salaries and pensions no longer cover even the staples of life. Bread lines have started to appear in neighborhoods as growing numbers of people are turning to cheap, government-issued bread to fill their tables.
On a cold, wet afternoon this week, the mood in the bread line was bleak. Most people did not want to be interviewed for fear of getting into trouble for criticizing the government of President Recep Tayyip Erdogan, which frequently detains his critics. Those who spoke declined to give their names.
When it comes to bread, a hallowed staple that Turks traditionally eat with every meal, the government has intervened significantly, pressuring bakeries to sell the traditional white loaf at a price lower than it costs to make, hoping to short-circuit the inflation that Mr. Erdogan fears could sow discontent and dim his election chances 18 months from now.
In one bakery, where the owners said they were on the verge of bankruptcy, a fierce argument broke out between the two partners. One blamed Mayor Imamoglu for undercutting the bakery by subsidizing sales. His partner blamed Mr. Erdogan’s government for forcing bakeries to keep prices low.
The partners asked not to be named for fear of trouble from the government. The senior partner said he had taken out a bank loan and was selling family jewelry to tide them over. If conditions did not change he would lose the business in a few months, he said, choking up.
Turkish central bank cuts rates, sending lira to record low
https://www.cnbc.com/2021/12/16/turkish ... d-low.html
Inflation in the country of 84 million is now at more than 21% and has climbed steadily as President Recep Tayyip Erdogan has refused to raise rates, meaning purchasing power for Turks earning local salaries has plunged.
Investors and economists have been desperately calling for Erdogan to reverse course, but he’s so far stuck to his unusual conviction that higher rates worsen inflation, rather than cooling it, as is the widely accepted economic principle.
“Today’s move provides further evidence, if any were needed, that macro developments are playing little role in the CBRT’s policy formulation,” Tuvey wrote in a note Thursday, noting that the lira has tanked 36% against the dollar since the start of November alone. Inflation is expected to jump to as high as 30% in the coming months.
And the speed of the drop has been almost exponential; the drop from 3 lira to the dollar to 4 took two years beginning in 2016, while the currency plummeted from 10 to 15 to the dollar in about six weeks beginning in November.
“Under the industrial structure of Turkey, high FX volatility causes businesses to lose control over their costs. If costs are not controlled, the reaction from businesses is to stop manufacturing and quoting prices on the sale side,” Tunca said. “In other words, pricing mechanism becomes frozen, a fact which has a great potential of causing [a] sudden stop at both the microeconomic and macroeconomic level.”
As far as the lira’s future is concerned, Tunca says Turkey created the crisis itself: “Under current conditions, it is impossible to guess at which level the currency depreciation is going to end. As long as the government’s trial continues, the sky is the limit for the Turkish lira.”
Hvala mu za sve sto je uradio za grcku i grcki narod!
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1974: 1.5 milijardi dolara u jednoj godini. 
