Turkey’s economy has the ability to recover from shocks and the lira is finding its true balance, Treasury and Finance Minister Nureddin Nebati said.
The Turkish government has a strong economic model to promote high growth and a low current account deficit, Nebati said in an interview with state-run TRT television late on Tuesday.
“Turkey’s macroeconomic indicators have no way of pushing the value of the U.S. dollar against the Turkish lira that high,” he said. “The Turkish lira is moving towards a level where it will find its true balance.”
The lira sank to a record low against the dollar this week as local deposit holders and foreign investors sold the currency due to concern about the government’s economic programme, which includes cutting interest rates despite accelerating inflation.
In response, President Recep Tayyip Erdoğan announced a scheme to compensate Turkish lira deposit holders for any losses for the lira against the dollar.
“The Treasury and Finance Ministry has worked with the central bank for days, studying alternative scenarios,” Nebati said of the plan. “Even in the worst-case scenario, individuals come out better off.”
The lira was trading 0.2 percent weaker at 12.54 per dollar as of 10:29 a.m. local time in Istanbul. It hit the record low of 18.36 per dollar on Monday. Losses for the currency this year total more than 40 percent.
Ahval