Turkey: Erdogan Measures to Support Exports & Employment

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THE chairman of Turkey Recep Tayyip Erdogan presented tonight one target series of measures which is to prevent further “dollarization” of the economy and to encourage pound deposits, once again defending its policy of low interest rates, even though the pound has collapsed to record levels.

After the cabinet meeting, Erdogan said the measures would ensure that citizens would not have to convert their pounds into foreign currency, while also supporting exporters and retirees. He reiterated that there would be no setback from the new economic model based on low interest rates, insisting that a reduction in interest rates by the Central Bank would lead to a drop in inflation (currently exceeding 21%) “within a few months”. He also insisted that fluctuations in exchange rates and prices are not based on fundamental economic figures.

According to Erdogan, export companies that are struggling due to exchange rate fluctuations will be given a fixed-term currency contract through the Central Bank. The government also plans to cut corporate taxes by 1% and provide credit to support employment.

The Turkish president claimed that the foreign exchange reserves of the Central Bank will increase to more than 135-150 billion dollars. He insisted that he would not allow state-owned banks to use their loans to make money and said that no investor should make speculative moves.

According to Erdogan, the uncertainty of exchange rate instability does not reflect the reality of the country. He even insisted that there is no shortage of foreign exchange in Turkey, but plenty.

For the banking sector, he said that he is stable, while he once again ruled out the possibility of early recourse to the polls.

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