Economist Mahfi Egilmez predicted the exchange rate for US Dollar to Turkish Lira(TL) as 7.5 in 2019, and he further referred to IMF’s new year expectation of the USD exchange rate to be 10.21 TL per USD, Turkish Yenicag daily reported.
Egilmez reflected on what the Turkish economy went through in 2018, giving new expectations on what could happen in 2019.
According to Yenicag Daily, Egilmez mentioned that, what the Turkish people had encountered with rising inflation during the 2002 crisis, resorting to the USD to maintain value of their currency, is the same incident that happened last year due to recent economic problems.
He stressed that even the vendors in the street, who do not have any business with the USD, have increased interest in it due to economic turbulence in Turkey. As demand increased, there was a serious decline in the Consumer Confidence Index (CCI).
Egilmez highlighted that “slow change in the USD exchange rate from 3.70 to 4.20 TL can be tolerable, nevertheless, increasing abruptly to 7+ is a great danger. In that case, importers have great trouble and if the USD rate drops from 7 TL to 5.20 TL, the exporter will face serious trouble.”
Citing misleading targets of the Central Bank, Eğilmez said that “the Central Bank says they have a 5 percent target for the Consumer Price Index (CPI) in the first months of the year and increase the expectations for the CPI to reach 12 percent in the second month of the year. So this means, confidence in the Central Bank is lost.”
He added that “this loss of confidence has affected the investor, and it will cause a severe decline in foreign exchange through the investments in the country.”
At a conference in Altınbas University in Istanbul, talking about the IMF’s predictions for the USD exchange rate for 2019, inflation, unemployment or growth, “Eğilmez said that the USD exchange rate in 2019 will be 7.5 TL.”
Eğilmez stated that “IMF expects the USD exchange rate in 2019 will be 10.21 TL.”
After the news reporting his USD-TL expectations have started to circulate in Turkish media, stock exchange market in Istanbul plunged on the first day of the new year and many stake holders reacted to his comments as reliable predictions.
“That was not a prediction, but an example”
Hours later the reactions on market, Egilmez tweeted about the news reports, which allege he made USD-TL predictions for 2019.
“I said many times, and repeat once again that I’ve not been predicting any exchange rate for two years. Referring to the figure, which I shared as an example in a conference, as my prediction is absolutely wrong. I have no exchange rate predictions.”
Defalarca söyledim, tekrar söylüyorum ben son 2 yıldır kur tahmini yapmıyorum. Bir toplantıda örnek olarak verdiğim Dolar kuru düzeyini tahminim gibi yorumlanması yanlıştır. Kur tahminim yoktur.
— Mahfi Eğilmez (@mahfiegilmez) January 1, 2019
As comments to his tweet, one of his followers shared a photo of presentation screenshot which shows economic predictions comparison of government, IMF and ME(his) for 2019, and asked him whether he shared this visual content at the conference or not.
In the picture IMF’s USD-TL prediction for 2019 is given as 10,21, and his estimates as 7,50 TL.
Hocam bu görseli paylaştınız mı pic.twitter.com/0sROg4HWaw
— Güray MOLLAOĞLU (@GurayMollaoglu) January 1, 2019
As a reply to his follower, Egilmez tweeted as, “That was not a prediction, however, just to bolster predicting has no sense in such occasions. I underlined in the conference to dismiss my figures.”
O bir tahmin değil, sadece bu tür ortamlarda tahminlerin anlamsızlığını vurgulamak için seçilmiş bir oran. Konferansta bunların ciddiye alınmaması gerektiğini söyledim.
— Mahfi Eğilmez (@mahfiegilmez) January 2, 2019
The same person replied as, “I was there and listened to all your conference, and you said your prediction on unemployment rate as 14 percent, moreover you mentioned IMF’s growth predictions. Is IMF’s USD-TL exchange prediction the only irony here?”
Mahfi hocam konferansınızı can kulağı ile dinledim, işsizliği 14% beklediğinizi söylediniz, IMF in büyüme oranına değindiniz, ironik olan sadece IMF in kuru mu
— Güray MOLLAOĞLU (@GurayMollaoglu) January 2, 2019
Following that, Eğilmez made no comments further. Some of his other followers claimed that the fear of being government’s target forced Egilmez to soften his remarks.
Some other video footages circulating on internet show that Egilmez made the same presentation in recent months in many other universities across Turkey. In those videos, it’s obvious that he emphasises those figures are just examples, but not predictions. He over and over urges the audience to underestimate his figures.
On the other hand, he explicitly says that 2019 will be worse than 2018 for Turkish economy.
Egilmez is one of the most respected and economy experts and a well-known columnist in Turkey.