There is “no hesitation” regarding the implementation of the government’s economic program, a top Turkish finance official said recently, emphasizing they were working in “close coordination with our institutions.”
“We have sufficient tools (at our disposal). There is no hesitation regarding the implementation of the program. We are working in close coordination with our institutions,” Treasury and Finance Minister Mehmet Şimşek was quoted as saying late on Friday.
His statements, shared by the Banks’ Association of Türkiye (TBB) came following recent volatility in the Turkish lira and main stock market, after authorities detained Istanbul Mayor Ekrem Imamoğlu as part of investigations into alleged corruption and terror links.
On Sunday, the Turkish court jailed Imamoğlu on corruption charges while he was released under control over a separate terror charge.
The currency depreciated around 12% on Wednesday to 42 per dollar, but recuperated later during the day and was trading at around $38 on Friday.
The stocks traded on Borsa Istanbul meanwhile lost an average of 16.57% of their value on a weekly basis, Anadolu Agency (AA) said late Friday. It closed the week at 9,044.64 points.
While the BIST 100 index was down by 766.30 points compared to the previous close, the total transaction volume stood at TL 166.2 billion (around $4.38 billion).
The minister, however, said for fluctuations to be “temporary” while stating that the medium-term program (MTP) increased the resilience of the economy against shocks and strengthened it.
He also said that fluctuations are being monitored closely and in coordination with all relevant institutions, reporting that in addition to the measures taken, the measures to be taken when necessary are also being determined. He also pledged the program will proceed with determination.
Earlier this week, the Turkish central bank announced several new measures to calm markets after the Turkish liras weakened to a fresh low and the benchmark BIST 100 index also plunged.
The bank on Thursday said it decided to start conducting lira-settled foreign exchange forward-selling transactions.
Also at an unscheduled Monetary Policy Committee (MPC) meeting later on Thursday, the bank raised its overnight lending rate to 46% from 44%.
On Sunday, the governor of the Central Bank of the Republic of Türkiye (CBRT), Fatih Karahan, was also expected to meet with board members of the TBB to discuss recent developments in the market, three banking sources with knowledge of the matter told Reuters.
Since the summer of 2023, Turkish authorities have moved on with the implementation of more conventional macroeconomic policies, aiming to bring down inflation. Inflation was down to 39.1% last month from nearly 75% in May last year, according to official data.
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