Today: Thursday, 25 April 2024 year

Erdogan to curb inflation and halt lira slide

Erdogan to curb inflation and halt lira slide

Turkish President intends to curb inflation and halt lira slide, the measures would be taken to reduce interest rate and exchange rate pressures, and to combat local currency inflation, AhwalNews reported.

Turkey faces the economic unbalance, the urgent economy summit should find a decision how to curb the inflation and make Turkish lira stable again. President Erdogan convened an emergency meeting with his economic team on Wednesday as the lira continued to tumble. So far, it is not known what kind of the measures it would be.

“The central bank will continue to effectively use the instruments that it has in its possession,”

statement from the Turkish presidency reads.

According to the Institute for International Finance had laid out Ukraine, China, Argentina, South Africa and Turkey as the top five most vulnerable to changes in risk appetite. Current account deficit widens up to 6 percent of GDP and lira slide continuously; the experts suppose the Cabinet urgently to find a cure for all the ailments in the Turkish economy as the most critical polls on June 24 are approaching rapidly.

No need to remind, markets rallied last month when Mr Erdogan announced snap elections, as investors assumed that a quick and early campaign would bring stability and structural reform at a time of growing warnings that the Turkish economy is overheating. Last week, the Turkish prime minister Binali Yildirim announced a spending spree aimed at wooing wavering voters, with a total cost of 24bn lira ($5.6bn). Those fears have put fresh pressure on the currency, so too have higher than expected inflation.

However, the official presidency statement declares that public resources will be used to support growth in the future as they are being depleted today; while a shift to a more orthodox fiscal policy is not mentioned feeding already existing worries on Turkey’s fiscal accounts.