The recent volatility in the foreign exchange market is temporary, the Turkish finance minister said, as the lira hit a fresh record low of 32 against the U.S. dollar on Monday.
“The recent volatility in the FX market should be viewed as temporary. The central bank is committed to anchoring inflation expectations using all the tools at its disposal,” Treasury and Finance Minister Mehmet Simsek said on social media platform X on Monday.
“We will continue to tighten fiscal policy to help the central bank reduce inflation,” he added.
The upgrade from Fitch, raising Türkiye’s long-term foreign currency debt rating to B+ from B and the outlook to positive from neutral, reflects the strength of Türkiye’s sound economic policies, the minister said.
Simsek said the current account deficit is narrowing more rapidly than anticipated, and is on track to fall to well below 3 percent of GDP this year.
The share of Turkish lira deposits in total deposits has risen by 12 percentage points since August and the government expects that this trend will continue as confidence in the program grows, the minister said.
“It’s important to bear in mind that achieving price stability takes time,” the minister said, noting that after local elections, Türkiye will keep pursuing its medium-term program, including reforms that will boost productivity and enhance competitiveness.
The Turkish lira lost some 4 percent of its value against the U.S. dollar in February. The country’s inflation rate surged to 67.07 percent in the same month. ■
