Şimşek: “No Extraordinary Market Volatility in the Past Week”

Turkey’s Minister of Treasury and Finance Mehmet Şimşek reassured markets that there has been no unusual volatility in the past week. Speaking at a press conference for the launch of the Medium-Term Program (OVP), Şimşek emphasized that both domestic and global shocks had influenced economic dynamics, but the government’s response remained effective and focused on disinflation.

“In the past week, there has been no extraordinary movement in the markets—not last night, not today,” Şimşek said, underscoring that financial stability is being maintained.

Context: From Trade Wars to March Volatility

Şimşek noted that it can be difficult to distinguish the impact of international versus domestic events when they overlap. He pointed to the U.S.-China trade tensions under Donald Trump and the turbulence around March 19 as examples of overlapping shocks that complicated analysis.

“When internal and external factors occur simultaneously, it is very hard to separate them. Trump’s trade wars and the March 19 process happened on top of each other,” he explained.

Despite these challenges, Şimşek argued that Turkey has responded appropriately:
“The impact of internal and external shocks may have limited growth, as well as the decline in risk premiums and interest rates to some extent. But we reacted correctly. We prioritized the disinflation program decisively, and we achieved results.”

Market Indicators and Reserves

The Finance Minister highlighted that Turkey’s financial indicators remain resilient:

• Reserves: Şimşek reminded that current reserves are higher than the peak level reached in March, showing ongoing improvement in external buffers.

• Risk premium: Turkey’s risk premium remains close to levels seen earlier this year.

• Interest rates: After a sharp rise earlier in the year, rates have significantly come down.

“Despite all these developments, resilience within our program is clear,” he concluded.

Medium-Term Program Priorities

The press conference was part of the presentation of Turkey’s Medium-Term Program (OVP), which focuses on ensuring macroeconomic stability, lowering inflation, and sustaining growth. Şimşek underlined that structural reforms and consistent monetary-fiscal coordination will remain central pillars of the program.

He stressed that while global financial uncertainty and political turbulence present risks, the government will continue to anchor expectations and prioritize stability:

• Disinflation first: Fighting inflation remains the top priority.

• Resilient growth: Economic activity will be managed to balance demand without triggering volatility.

• Investor confidence: Turkey will keep working on lowering risk perceptions and ensuring stable capital inflows.

Conclusion: Confidence in Economic Policy

Mehmet Şimşek’s statements come at a time when markets remain watchful of both international risks and domestic political developments. By asserting that no extraordinary volatility has been seen in the past week, the Finance Minister aimed to send a message of stability and reinforce confidence in Turkey’s economic management.

His repeated emphasis on the disinflation program, alongside the progress in reserves and falling interest rates, signals the government’s determination to maintain discipline despite external shocks. For investors and citizens alike, the message is clear: Turkey is navigating challenges, but its economic program remains resilient.