Turkish PM holds meeting on ‘economic fluctuations’ with ministers, AKP officials

ISTANBUL

Economy Minister Zafer Çağlayan, Finance Minister Mehmet Şimşek, Development Minister Cevdet Yılmaz and ruling Justice and Development Party (AKP) deputy head Numan Kurtulmuş attended today to a special meeting on economy led by Prime Minister Recep Tayyip Erdoğan in Istanbul. AA photo

The Turkish financial market is being affected by fluctuations in the world economy following the U.S. Federal Reserve’s recent decision, the Prime Minister’s office said in a statement after a special meeting on the economic situation in Turkey late July 14.

The meeting, led by Prime Minister Recep Tayyip Erdoğan, took place in Istanbul and lasted around four hours. .Deputy Prime Minister Ali Babacan, Economy Minister Zafer Çağlayan, Finance Minister Mehmet Şimşek, Development Minister Cevdet Yılmaz and ruling Justice and Development Party (AKP) deputy head Numan Kurtulmuş also attended the meeting. The meeting came as the parity between the Turkish Lira and the U.S. dollar reached record highs in recent years and the Turkish Central Bank had sold a total of $3.6 billion dollars since last week to hold up the lira.

The statement pointed out that the U.S. central bank’s (Fed) decision on May 22, which said it could slow down its bond-buying, was the main factor that triggered these developments. “After these statements the U.S. Treasury’s 10-year loan interest has started to rise and a fast capital outflow from the developing markets has begun. A decline in the growth performance and outlook of the developing countries – particularly China – has become an additional factor that accelerated this outflow,” it said.
Turkey’s financial markets that are mostly integrated with the international financial markets are affected by these developments.

“Due to global developments and the events that took place recently, there have been fluctuations in exchange rates, the stock market index and the cost of internal and external debt, the same as other developing countries. Our Central Bank and other institutions are taking the necessary steps to reduce to the minimum the negative effects of these developments that are affecting all developing countries,” the statement said.

Central bank implementing policies for ‘financial stability’

“The radical amelioration in Turkey’s economic basis is the main element that will cause these fluctuations to affect our country at the lowest level. We, as the AKP rule, have never deviated from the financial discipline and we will not. Our Central Bank is implementing policies aiming at price stability and contributing to financial stability. We are pursuing our structural reforms with determination,” it added.

The statement also said Turkey would continue to lend support to investors and protect competition.

“Turkey will continue to be a center of attraction thanks to its growth led by the private sector, its policy prioritizing the competition and reforms and its solid economic basis,” it said.