Turkish Inflation Crisis: Rising Rental Prices Force Central Bank Governor to Move In with Parents

2023-12-16 11:08:00

In November, inflation reached 62% year-on-year in Turkey and rental prices increased by 77.1% over the same period in Istanbul.

The situation is common among young Turks, less so for a former Wall Street executive: due to the massive rise in prices, the governor of the Turkish Central Bank says she was forced to return to live with her parents.

“We couldn’t find accommodation in Istanbul. It’s terribly expensive. We moved in with my parents,” explained this Saturday, December 16 to the Turkish daily Hürriyet Hafize Gaye Erkan, who took up his duties at the beginning of June after the re-election of President Recep Tayyip Erdogan.

62% inflation over one year

The banker, aged 44, had lived in the United States for two decades, where she held senior positions within several large banks, including Goldman Sachs.

“Is it possible that Istanbul has become more expensive than Manhattan?” she asks in this interview.

Inflation reached 62% over one year in Turkey in November, fueled in particular by the devaluation of the Turkish lira, and rent prices increased by 77.1% over the same period in Istanbul, according to a study by the Istanbul University of Bahçesehir.

Rent caps

To try to stem inflation, the Turkish Central Bank has raised its key rate from 8.5% to 40% since June.

“We are reaching the end of monetary tightening measures,” however, indicates the governor of the Central Bank, the first woman to head the institution.

Faced with the outcry from tenants, threatened by soaring prices, the Turkish government has capped the revision of housing rents at 25%.

But according to experts, this measure has only aggravated tensions, pushing many owners to seek by all means, sometimes fraudulent, to get rid of their tenants in order to re-rent their properties, sometimes several times more expensive.

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