Turkey Taking Measures to Support Economy

Market developments will be closely monitored by the Turkish Central Bank, and necessary measures will continue to be taken to support financial stability, said Turkey’s Economic Coordination Board, according to a source close to the meeting.

The country’s Economic Coordination Board gathered to discuss recent developments with the participation of Prime Minister Binali Yildirim and the country’s top economic officials, including Deputy Prime Minister for Economic and Financial Affairs Mehmet Simsek, World Bulletin reported.

Friday’s meeting came after the national Turkish lira currency hit another record low against the US dollar, at 3.407, following US Federal Reserve Chair Janet Yellen’s remarks Thursday that the Fed could raise interest rates “relatively soon”.

The currency has plunged about 9% since mid-November, hitting new lows almost daily last week.

“At the meeting, economic developments which affect global markets as well as the Turkish market were extensively discussed,” said the source, who asked not to be named due to restrictions on speaking to the media.

According to the source, officials at the meeting said the recent changes in exchange rates were caused by developments in global markets.

“But all measures were reviewed in order to limit their impact on the country. The Central Bank will follow economic developments very closely and take necessary measures in line with its price stability target.

“Reforms that increase the economy’s resilience will be accelerated, and strong support to the real sector will continue,” the source added.

 External Debt

Turkey’s external debt is at a relatively “controllable” level despite a recent increase, SimSek said Saturday.   

Speaking at a panel discussion at the NATO Parliamentary Assembly in Istanbul, Simsek focused on Turkey’s overall economic situation.  

Among some good developments, he said income inequality has narrowed and the banking sector has been going very well.

He also said that female labor force participation rate had reached 32%, but added, “there is still a long way to go.”

However, Simsek said terror attacks in the country had a negative impact on the economy, resulting in a slower growth rate, currently standing at 3.4%.        

That compares to last year’s rate of 4%, according to World Bank data, but is still higher than the European Union’s 2015 rate of 1.9%, and the 2% growth rate among OECD members.