Turkey is not just expensive, it is very, very, very expensive. So quipped Mustafa Gultepe, head of the Turkish Exporters Assembly (TIM), when speaking to reporters on August 6 during a meeting of exporters in the Central Anatolian city of Kayseri—but actually, he was deadly serious.

“In Turkey, the cheapest thing right now is FX. It is even cheaper than watermelon,” added Gultepe.

There is no real difference between 33 or 37 when it comes to the dollar/Turkish lira (TRY) exchange rate, according to Gultepe.

“Make it 37,” Gultepe urged the central bankers.

“The annual rise in the exchange rate stands at 25%. But the increase in my costs amounts to 110%,” he pointed out.

In April, Kazim Tayci, head of the Istanbul Cereals Pulses Oil Seeds and Product Exporters' Association (IHBIR), called on the government to introduce a dual exchange rate system.

As things stand, Turkish exporters are obliged to sell 30% of their FX revenues to the central bank.

The dual exchange rate system would help exporters deal with "ballooning costs" and international competition by letting them sell their dollars to the central bank at a better price, Tayci said.

Tayci also demanded a dual USD/TRY exchange rate of at least TRY 40.

Such demands, of course, never stop. If the government delivered 50, they would ask for 60.

Between March and July, the Erdogan administration was seen applying its straight-line USD/TRY rate policy. It drew the line around the 32-level this time around.

With the arrival of August, the line was shifted to the 33s.

In June 2023, following the post-election appointment of Turkey’s new economic team led by finance minister and ex-Wall Street banker Mehmet Simsek, the regime U-turned on monetary policy and launched a tightening process that is ongoing.

However, the lira remains subject to a system of control. By limiting currency devaluation, the officials aim to restrain inflation, while also limiting the interest that is paid by the central bank on Turkey’s currency-protected accounts, known as KKM, and improving confidence in the local currency.

Production activity in Turkey, meanwhile, simply produces a trade deficit. The so-called exporters use subsidised energy (that is imported), the subsidised currency, subsidised loans, a subsidised labour force and subsidised land.

They pay no tax and they have no environmental protection expenditures.

They serve as contract manufacturers for foreign brands. They produce no added value. They are only able to engage in price competition thanks to their subsidised inputs.

When exports fall, imports and the trade deficit fall.

Throughout Turkish history, there has not been a single capital holder that has invented something or anything. Nothing at all. Zilch. Zero in nominal terms.

They just know how to partake in the state ecosystem and bleed the country dry.