Korkut Boratav: War collapsed AKP’s currency-protected deposit bill

Russia’s invasion of Ukraine is expected to have a profound effect on Turkey both politically and economically.

Western allies, led by the USA and the European Union, announced tough economic sanctions to punish Russia. While the decisions taken shook the global markets, their impact began to be felt in Turkey as well.

Economist Prof. Dr. Korkut Boratav evaluated the possible effects of the Ukraine war on Turkey.


Speaking to Sözcü, Boratav said the situation before the war: “The currency-protected deposit system announced by the AKP government with a big demonstration started to yield results as an election program in the short term. It was effective. The tension in the foreign exchange market had eased,” he commented. Boratav said that after the war, “The war destroyed the expectations regarding the currency protected deposit system”.

‘It seemed to have gained stability, but the war program collapsed’

“All calculations were on keeping the exchange rate under control in the short term and stopping the escalation of inflation. Thanks to the increase in tourist revenues in the middle of this year, there was a hope of getting results by holding the elections. The instability created by the interest rate cuts would be calmed in the short term, and the symptoms were also positive. The dollar rate seemed to stabilize around 13.5, but…” Boratav said, and continued:

“The war triggered both the tension in the foreign exchange markets and the rise in energy prices, and therefore inflation. It collapsed the economy administration’s short-term electoral program and the currency-protected deposit scheme.”


Boratav also drew attention to Turkey’s economic ties with Russia and Ukraine, wheat imports from these two countries, the weight of these two countries in tourism and dependence on Russia in energy.

Stating that it is obvious that the sanctions imposed on Russia and the exclusion of Russian banks from the Swift system will shake the financial system of this country and feed the global economic instability, Boratav said, “If there is a quick agreement, the situation can calm down a bit. The harsh reactions of the West against Russia will continue to be effective,” he said.

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