By Janet Ekstract
ISTANBUL – The Turkish economy could gain momentum if Turkiye’s new Finance and Treasury Minister Mehmet Simsek is able to take steps to stabilize prices which he said would be his top priority. Turkish President Erdogan said on Wednesday that Simsek will take unspecified steps quickly in tandem with the Turkish Central Bank, insisting that his own views on interest rates haven’t changed. Analysts view the move to appoint Simsek a former deputy prime minister and financier, as a sign that the dire days of inflation could be coming to an end. Erdogan’s other new appointee, new Central Bank Governor Hafize Gaye Erkan who has sat on a number of financial boards as well as taking on co-CEO and CEO roles is also viewed by experts to be of a similar fiscal attitude to Simsek.
As Erdogan reminded those who think he may have shifted his long-held views: “Some of our friends should not be mistaken, such as (asking) ‘Is our president going for a serious change in rate policies?’” The Turkish leader made the comment on his return from Azerbaijan on Tuesday while talking to reporters, according to media reports out Wednesday. He added:”But upon the thinking of our treasury and finance minister, we have accepted
that he will take steps swiftly, comfortably with the central bank.” With inflation at a 24-year high, analysts at major investment banks are expecting Turkiye’s central bank to begin sharply increasing rates at its monetary policy committee meeting on June 22.
The Turkish president said his eye is on lowering inflation and reiterated that he outlined his expectations to the new central bank governor. As Erdogan commented: “Gd willing, neither our finance minister or our central bank governor will embarrass us and I think we will hopefully obtain positive results.” Currently, the Turkish lira is trading at roughly 23.56 to the U.S. dollar – a far cry from almost a decade ago when the Turkish lira was 17.4 to the U.S. dollar. Erdogan is banking on two well established and highly experienced financiers to get the Turkish economy back on track. With the price of produce and household goods skyrocketing daily, it will take tremendous foresight and intricate planning to steer Turkiye out of dire economic straits. Financial experts believe Simsek and Erkan are just the two who can pull off what might be the feat of the century
