Economic policy

Turkey’s new economic policy will change the financial landscape

President Recep Tayyip Erdogan said Turkey had launched a historic shift in economic policy, setting aside the “classic understanding” of controlling inflation with high interest rates.

Erdogan also stressed that the government had no budget problems and was not seeking IMF help. (AA)

Turkish President Recep Tayyip Erdogan has said his country’s economic climate will be “completely different” this summer when balance is established in the financial system.

Erdogan called on academics and economists to contribute to the government’s new economic model during a meeting with members of the press and academia in Istanbul on Friday.

Turkey “has adopted an economic policy based on the country’s growth with investment, employment, production, exports and current account surplus,” Erdogan said during the meeting at the presidential office in Dolmabahce.

The Central Bank of Turkey’s foreign exchange reserves currently stand at over $115 billion and should be in a much better position, according to Erdogan.

“Today Turkey has the infrastructure it needs in all areas, from education to health, from security to law, from industry to tourism,” he said.

Stressing that economic indicators showed that the time had come for this new policy, Erdogan said: “We aim to place Turkey among the 10 largest economies in the world on this solid basis.”

The benefits of Turkiye’s new approach will become evident in the next three to six months, he added.

READ MORE:Erdogan: Turkey has foiled speculative games on the economy

Currency caps historical week

The Turkiye lira was on track for its strongest week on record on Friday.

The lira fell to 11.7 to the dollar – albeit after strengthening to 10.25 on Thursday, its highest level in over a month, following a series of government measures and the central bank to support the currency.

The currency soared 44% after a promise that the government would cover foreign exchange losses on some deposits.

Erdogan on Monday unveiled the plan, in which the Treasury and the central bank would reimburse losses on lira deposits converted into foreign currencies.

The anti-dollarization plan sparked four consecutive days of gains as the Turks converted some $900 million of hard currency into liras, according to Finance Minister Nureddin Nebati.

Nebati, in an interview with NTV television channel on Thursday, said Turkey was “using all the instruments at its disposal in a positive way”.

READ MORE: Lira makes gains after Erdogan declares his intention to support the currency

Source: TRTWorld and agencies