Turkish Finance Minister Mehmet Simsek announced on Monday that the government will continue to tighten monetary policy to help the central bank reduce inflation, highlighting Fitch’s raising of the country’s sovereign rating.
In comments on the X social media platform, Simsek said that Turkey is committed to maintaining appropriate policies and implementing structural reforms,
While achieving price stability remains its top priority.
The inflation rate rose to 67 percent in February on an annual basis, exceeding expectations and maintaining pressure to tighten monetary policy. Economists expect inflation to fall to about 40 percent by the end of the year. Simsek continued, “The Turkish Central Bank is committed to achieving stability in inflation expectations using all the tools at its disposal. We will continue to tighten monetary policy to help the Turkish Central Bank reduce inflation.”
The lira recorded a further decline today, Monday, and reached a new record low of 32.0075 against the dollar, bringing its losses since the beginning of the year to nearly eight percent.
Fitch raised Turkey’s rating on Friday from B to B+, noting that a tighter path for monetary policy helps combat inflationary trends.
After President Recep Tayyip Erdogan was re-elected in May, Turkey abandoned the unconventional policy of keeping interest rates low and unleashed a tightening of monetary policy, raising the key interest rate to 45 percent from 8.5 percent since June.
Turkey is expected to take more steps in its monetary policy to calm inflation after the local elections scheduled for March 31, which data and some economic experts indicate will cause more pressure on the Turks, who have already been suffering for years due to high prices.
2024-03-11 09:52:00
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