High Interest Rates in Treasury Domestic Borrowing Must Not Be Overshadowed by the Fund Fraud

While Turkey has been preoccupied for the past month and a half with a fund fraud affecting a wide segment of society, it is discussed that the major costs and risks in the Treasury's high fixed-rate domestic borrowings should not be overshadowed by this situation.

While the fund fraud in Turkey has affected a broad segment of society for a month and a half, it is stated that this situation should not overshadow other critical developments on the economy. While the scale of the fund fraud and its social impacts are being debated, the high interest rates committed by the Treasury in domestic borrowing, especially in fixed-rate borrowing, draw attention.

The Treasury held 25 fixed-rate auctions this year, with the lowest interest rate in these auctions recorded at 29.09 percent in January for the 2035 maturity. The interest rate on the same maturity security rose to 35.12 percent in August. While the discrepancy between the inflation targets in the Medium-Term Program and these high interest commitments raises question marks, it is expressed that the burden that borrowing costs will create in the future is not sufficiently perceived.