What does "T" stand for?

What does “T” stand for?

Turkish Central Bank led by Governor Basci has been the leading news of the economy pages of the newspapers this year.

Some praised without a condition, some condemned without a solid base but one thing is sure: many didn’t understand what was going on.

Here is a free accounting of the year then. I am a simple person who thinks simple. My figures will also be simple:

1-CBT’S inflation target for 2011 is 5.5%. It will be 10.5% (most likely) at the end of the year. What a success for someone that targets inflation! Buzz…

2-CBT insists that inflation will come down to 5% in 2012. Guess what  the market call is! People expect inflation to be 7.2% next year, showing that they don’t take CBT’s words seriously. Buzz…

3-We learned that despite CBT’s full confidence, macro prudential measures are not enough to curb the credit growth unless banking sector’s regulation steps in. Buzz…

4-CBT feared a recession in the middle of the year, and had to watch Turkish growth skyrocketing in the second and the third quarters of the year. And then we had to listen to them telling us how the economy is far away from slowing down. Excuse me???? Are we listening to the same guys here??? If you cannot even rightly see the growth momentum, how will you be able to run your monetary reaction? Buzz…

5-CBT aimed at keeping the “low rates for long”, we ended up having a meaningless “policy rate” and actual TL rates are around 11% up from 5.75%. Buzz…

6-CBT claimed that current account deficit will come to “sustainable” levels, which shall be around the figure aimed in the Medium Term Programs. CAD/GDP will be double digit in 2011 and come down to 8% in 2012. Doesn’t look sustainable! Buzz…

7-A few months ago, Governor Basci called the CBT” more successful in dealing with the currency than the credit growth”. TL stands as the weakest currency among the peers bringing some 4.5 points of pass through inflation. Meanwhile Governor Basci declared war in the currency market saying that “we should not undermine CBT’s power”. So we didn’t. But nothing has happened. TL is all time low. Buzz…

Well but everyone continues to give credit to the CBT for one thing: reading the problems of European economy better and earlier than global peers did. That’s true and well done. CBT could read that growth and inflation would fall in Europe where as failing to see that these would rise for Turkey. So did we design the monetary policy for Euope??? Then perhaps one should remind CBT what does that “T” stand for in their name? It is the Central Bank of Republic of TURKEY! Read the Turkish economy accurately first!

Or else someone should tell how to run for the presidency of ECB to CBT’s top management. Perhaps one of them will be interested. We will of course be proud and relieved!