Turkey’s central bank is in command of monetary policy and it will take the necessary measures when needed to defend the lira and support the economy, Turkish Prime Minister Binali Yildirim said.
Fluctuations in the financial markets are temporary and their impact will also be temporary, Yildirim said in Istanbul on Wednesday.
Turkey’s lira has sunk to record lows against the dollar and euro this week on concern that the central bank lacks the independence to raise interest rates without the government’s go-ahead. President Recep Tayyip Erdoğan, who is calling for lower interest rates to boost economic growth, has appeared to take command of economic policymaking and analysts increasingly believe that the central bank can’t raise rates without his approval.
Developments in Turkey’s foreign exchange markets are related to global conditions and regional geopolitical risks, Yildirim said. Turkey, a member of NATO, is partnering with Russia and Iran in trying to map out a political future for Syria, raising concern that it is turning from the West. Erdoğan has criticized a recent chemical attack on the outskirts of Damascus, calling on the international community to take steps against Syrian President Bashar Assad.
On inflation, which currently stands at 10.2 percent, three times the average in emerging markets, Turkey’s government will not let up in the fight against price rises, Yildirim said.
Yildirim on Wednesday also urged the United States and Russia to stop their “street fighting.” He said, “It’s street fighting. They are fighting like street bullies. But who is paying the price? It’s civilians,” Yildirim said in a televised speech in Istanbul.
“Now is not the time for rivalry. It’s the time to heal the wounds in the region and to come together,” he said.