Finance Minister Mehmet Şimşek Highlights Low Inflation as Key Policy Objective
Finance Minister Mehmet Şimşek has emphasized that the primary goal of fiscal policies is to achieve low inflation. According to Şimşek, the cornerstone of their program is disinflation, and there are no explicit or implicit exchange rate targets. He noted that past country experiences demonstrate that successful disinflation programs lead to a real appreciation of the exchange rate.
Şimşek stated that the success of rule-based and predictable policies boosts confidence, supporting portfolio preferences towards the Turkish Lira (TL) and attracting more resources into the country. As foreign interest in TL assets grows, banks and the real sector also secure long-term and more favorable financing from abroad. Additionally, external financing opportunities have increased through multilateral banks. These resources are utilized not only in short-term financial investments but also in production and exports.
Şimşek mentioned that the positive outcomes of the program would further lengthen the duration of international capital inflows. He pointed out that the portfolio preferences of residents in Turkey, along with the increasing influx of external resources, significantly strengthen the country’s reserves.
Finally, Şimşek reiterated the ongoing commitment to taking measures that will preserve and enhance macrofinancial stability in line with the program’s objectives.
Source: Statements by Finance Minister Mehmet Şimşek.