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Late action is more expensive

10 6 1

It would be wise to hang the following quote by Josiah Charles Stamp at the entrance of the Turkish Central Bank in Ankara: “It is easy to dodge our responsibilities, but we can’t dodge the consequences of our responsibilities.”

The Turkish Central Bank must have seen that both the price and financial stabilities in Turkey are at the edge of a cliff that two weeks later it raised its one-week repo rate further by 1.25 percentage point to 17.75 percent on June 7. For this or that reason, the price of the Central Bank’s belated action has been very costly. We do not know the extent of further damages that will be incurred in the upcoming months. But there will be damages. The situation is like an accident happening because of driving the vehicle much above the speed limits and not hitting the brakes on time when approaching a wall. All of us have watched this in “slow motion.”

The interest rate even after being raised is still below the money market interest rates. But the new rate has gone down well with the financial markets. Because the expectation of the financial market was that the........

© Hürriyet Daily News