Turkey’s Finance and Treasury Minister Mehmet Simsek on Thursday said that Turkey was on the path to achieving a positive real interest rate but stressed that the efforts to reach this threshold were far from complete during a World Bank-IMF meeting held in Marakesh, Morocco.
In his speech, where addressed the importance of a positive real interest rate in managing inflation expectations, Simsek discussed the post-election measures taken to control inflation expectations, particularly in the wake of the May general elections, during which Turkey’s Central Bank raised interest rates by a significant 2150 basis points, bringing the rate to 30%. He also hinted that the Central Bank might continue with tightening measures in the upcoming period.
Highlighting Turkey’s strong economic fundamentals, Simsek noted that the Turkish Lira (TL) was demonstrating resilience and appeared “attractive.” He made a clear distinction between local and general elections, stating that Turkey was set to experience five years of political stability, and it was essential not to conflate the two.
Simsek also acknowledged that reversing past economic policies would be a time-consuming endeavor, hinting at a commitment to ongoing reforms in Turkey’s economic landscape.