Gov’t, Central Bank taking measures to minimize problems in economy: PM Yıldırım

Gov’t, Central Bank taking measures to minimize problems in economy: PM Yıldırım

Gov’t, Central Bank taking measures to minimize problems in economy: PM Yıldırım

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Turkey’s government and Central Bank have been taking required measures to ensure the country suffers only minimal effects from the latest temporary fluctuation in the economy, Turkish Prime Minister Binali Yıldırım has said, adding that the cabinet was set to make an evaluation on economic issues during a new economic coordination board (EKK) meeting late on Dec. 2. 

The Turkish Lira has been one of the worst-hit emerging currencies against the U.S. dollar as well as against the euro following the U.S. presidential elections, due to both global and local uncertainties. As such, the steps to be taken by Turkey’s economic managers to ease the pressure on the lira are being closely followed by global markets. 

“The Turkish economy rests on robust fundamentals. Our finance sector and our companies are strong. We have been taking the required measures to minimize the effects of economic problems, by considering the global conditions thoroughly. Turkey saw much worse economic conditions four or five times in the past.
What we have seen in the markets following the U.S. presidential elections is temporary,” Yıldırım said at a press meeting to announce a fresh financing scheme for small- and medium-sized enterprises (SMEs).

“This wave of fluctuations will end. 2017 will be a much better year than 2016,” added the prime minister. 
He also noted that there would be an EKK meeting on late Dec. 2 to discuss the latest developments in the economy. 

“We will share which measures we agree on with our citizens after the meeting … The Central Bank is now also doing what it needs to do in an independent manner,” said Yıldırım. 

Turkey held EEK meetings in November, one under the leadership of Yıldırım and one headed by President Recep Tayyip Erdoğan, to discuss the latest economic issues. The board meets regularly, usually on a weekly basis, to discuss and set macroeconomic policy. But these meetings came after the lira hit fresh record lows against the dollar.

Fresh loan scheme for SMEs

Yıldırım said SMEs needed to be supported amid the sharp foreign exchange fluctuations. 

“Through the new scheme, SMEs will be able to benefit from up to 5 billion liras ($1.43 billion) in loans on a yearly basis for an interest rate below 10 percent,” he added. 

The scheme is being organized by the Turkish Union of Chambers and Commodity Exchanges (TOBB), Ziraat Bank, Denizbank and the Loan Guarantee Fund (KGF), according to data shared at the press meeting in Ankara. 

Fifteen percent of the loan risks will be held by the lenders while the remaining 85 percent will come from the KGF. Around 80,000 SMEs are expected to use the new loans.