Erdogan, Central Bank, set to extend playoff run
What do Michael Jordan, Cristiano Ronaldo, and Lebron James have in common? Albeit they've left their mark on history, each of them has one hell of a comeback story to tell their kids. MJ's famous "I'm back" resonates through the NBA. Rumour has it Lonzo Ball can still hear it in the Chicago Bulls locker room (should he ever play). However, there's one player that probably never crossed your mind, and he might stage the greatest comeback of all time: Recep Tayyip Erdoğan, for the Turkish Central Bank.
Many months ago, Turkey was fighting fire with fire. Their fire was inflation. Inflation is simply the increase of price rates over a period of time. Our star player, the great Erdoğan, first of his name, king of the.... (I digress). Anyways, in 2021, Turkey lowered it's interest rate by around 10%. The interest rate is how much extra a lender charges the borrower for the loan amount. This makes it easier to borrow money, as you don't have to pay as much interest on any loans. Erdoğan's main goal was to make sure Turkeys businesses and exports weren't affected. However when prices are so high, his plan to ship off his inflation to other countries lead to his exports dropping in the long run. Erdoğan's plan was faulty, but just like any famous ball-player, he knows how to rebound.
Turkey's central bank is not independent to the government. Berat Albayrak, the man responsible for their economic model in 2021-2022, was Erdoğan's son-in-law. Similar to if Dennis Rodman never got any rebounds for the Bulls, Albayrak was the piece of the puzzle that never fit. Now, under the leadership of newly appointed Princeton-alum Hafize Gaye Erkan, the central bank has raised their rates by 15%. This makes it much harder to borrow money, making it difficult to spend, lowering price rates, and slowly but surely extending that playoff run.