The goal of the Turkish government is to bring the inflation rate to a single-digit level, involving structural reform of the country's economic policy, Finance Minister Mehmet Simsek said on Thursday
ANKARA (Pakistan Point News / Sputnik - 06th July, 2023) The goal of the Turkish government is to bring the inflation rate to a single-digit level, involving structural reform of the country's economic policy, Finance Minister Mehmet Simsek said on Thursday.
"Turkey's economic program, aimed at fiscal discipline and reducing inflation, involves a gradual tightening of monetary policy and structural reforms," Simsek wrote on Twitter.
Turkey's annual inflation slowed down to 38.21% in June, the lowest in 18 months.
"One of the goals is to bring Turkey's state budget deficit to the level of the Maastricht criteria, as well as to reduce inflation rates to single digits in the medium term," Simsek added.
Simsek also pointed to the importance of ensuring macrofinancial stability and maintaining the country's development momentum.
On June 22, the Turkish Central Bank raised its key rate for the first time in more than two years, from 8.5% to 15%, in the policy U-turn to fight inflation. It was made at the regulator's first rate-setting meeting under its new head, Hafize Gaye Erkan. Many analysts expected a sharper increase, as Turkey's annual inflation stood at 39.6% in May.
In recent years, Turkish President Recep Tayyip Erdogan has pursued a policy of keeping the interest rate low. The Central Bank decreased the interest rate from 19% in early 2021 to 8.5% last February. The Turkish currency has lost more than 80% of its value in the past five years, and 44% of its value in 2021 alone.
