“Turkey is determined to implement a low-interest-rate policy,” said the nation’s Deputy Finance Minister Nureddin Nebati during early Friday.
The policymaker adds, “Rates should be decreased to combat supply-side inflation.”
"Turkey targets high job creation, high exports, low current account deficit and low foreign debt with a policy based on 'low rates, high production volume,'" per the Diplomat.
Additional comments
We need to evaluate Turkey's economy from a bigger window, rather than a narrow perspective only taking the exchange rate as a basis.
Under the current market conditions, there is no issue with the policy rate being kept lower than inflation.
Though there were turbulences in the real sector with the last exchange rate attack, our economy maintains all of its strength.
Since 2013, every time we attempted to implement our low interest rate policy, we were met with strong opposition. This time, we are determined to carry this out.
I suggest that all parties re-evaluate the wrongness of the 'high interest, low inflation' policy, that has been dictated to us, specifically for our country, which has a structural current account deficit.
USD/TRY regains upside momentum
Following the news, USD/TRY picks up bids to $12.15, up 1.35% on a day, while snapping the two-day pullback from the record top.
It should be noted, however, that the covid woes weigh on the US Treasury yields and the US Dollar Index (DXY) to keep the USD/TRY bulls in check.
