Foreign exchange rates to stabilize soon: Turkish minister

Foreign exchange rates to stabilize soon: Turkish minister

Foreign exchange rates to stabilize soon: Turkish minister

Foreign exchange rates will stabilize at a point where it should be and Turkey will ease the loss in its currency’s value, Economy Minister Nihat Zeybekci has said. 

Speaking to state-run Anadolu Agency’s Editors Desk on May 11, Zeybekci also said Turkey must increase supply, investments and production in order to be able to solve its inflation issue.

Zeybekci said steep fluctuations in foreign exchange rates had a negative impact on the inflation rate.

“The loss in the Turkish Lira’s value and a rising trend in oil and commodity prices have negatively been affecting our economic indicators. We have not reached what we originally desired in terms of the inflation rate, mainly due to the rising costs amid the parity fluctuations,” he noted, adding that Turkey would resolve this parity issue.

“The parity will regress to where it should be soon,” the minister noted.

“Turkey needs to give a boost to its supplies, investments and production to solve its inflation problem. To decrease demand is not an effective way to combat inflation,” he added.

A persistently high inflation rate has been one of the biggest problems of the Turkish economy right now, according to analysts and investors.

The lira is one of the worst performing emerging market currencies so far this year. Turkey’s lira firmed on May 10 as it continued to recover from a record low hit in the previous session, when President Recep Tayyip Erdoğan held an unscheduled meeting of his economic team to address the currency sell-off. The lira was at 4.26 on May 11. It touched a record low of 4.37 in early trade on May 9.

The Turkish government plans to revise its annual export target for 2018 from $169 billion to $172 billion, Zeybekci also said, adding that the GDP growth would likely be at 6 percent this year.

“In June, we will revise up our export target to $172 billion. We can expect even higher figures,” he said.

Turkey, having around $900 billion GDP, is strong in terms of economic depth and volume, Zeybekci said, adding that the country would likely close this year by a 6 percent GDP growth and the government would also take measures to decrease the country’s current account deficit.

The minister also noted that Turkey might make payments for all products, including energy products, from Iran in the lira.