Re:Turkey bans use of cryptocurrencies for payments
by imtringued on Friday April 16, 2021 @07:09AM
(#26832401)
I agree about one thing, the turkish central bank has kept inflation above 2% and real interest rates are roughly at 2%%, therefore it doesn't have to do anything anymore, it just has to wait for the market to do its own thing.
Of course COVID caused massive problems that need a one time fix but Turkey is not in the position of the USA where excess corporate savings are dragging inflation down. If inflation is in the double digits, then people are simply not saving enough. The only thing the central bank needs to do to encourage saving is to keep the interest rate above inflation and it did. The Turkish government can also raise taxes to reign in inflation as you said. If inflation falls faster than the interest rates this would further encourage savings.
Of course COVID caused massive problems that need a one time fix but Turkey is not in the position of the USA where excess corporate savings are dragging inflation down. If inflation is in the double digits, then people are simply not saving enough. The only thing the central bank needs to do to encourage saving is to keep the interest rate above inflation and it did. The Turkish government can also raise taxes to reign in inflation as you said. If inflation falls faster than the interest rates this would further encourage savings.