Turkish finance minister says rising energy prices are accelerating inflation


ISTANBUL (Reuters) – Turkish Finance Minister Nourdine Nebati said on Saturday that rising global energy prices are accelerating inflation in the country, but Ankara will continue efforts to reduce it, adding that the recent drop in the pound is “at risk.” acceptable” level.

Inflation hit 54% in February, and economists expect inflation to continue rising to 70% in the coming months after Russia’s invasion of Ukraine sent raw material prices soaring and the lira fell.

Speaking at a business conference in the southern resort town of Antalya, Nebati said a government-backed plan to protect lira deposits from devaluation helped avoid fears of what he called an “attack” on the lira exchange rate.

“What we’ve seen in recent months is that the exchange rate is stable and moving within an acceptable range,” he said.

The lira has fallen 11 percent against the dollar this year, largely due to the economic fallout from Russia’s invasion of Ukraine.

The currency fell 44% last year, mainly after a series of interest rate cuts long hoped by President Tayyip Erdogan sparked a currency crisis and pushed inflation to its highest level in 20 years.

Sterling’s protection system and costly central bank intervention in foreign exchange markets helped contain the currency crisis in December.

The central bank cut its key interest rate by 500 basis points to 14% between September and December, but kept it unchanged at its last three meetings.

Erdogan’s new economic plan prioritizes current account surplus, exports, credit and growth, while keeping interest rates low.

However, Russia’s actions in Ukraine, known as “special operations”, could exacerbate Turkey’s current account deficit due to higher commodity prices and a possible drop in tourist receipts.

Source link


Please enter your comment!
Please enter your name here