Reassurance meeting with investors in London ‘fruitful,’ Turkish Deputy PM Şimşek says

LONDON

Turkish Deputy Prime Minister Mehmet Şimşek said the meetings in London meant to reassure investors about the direction of monetary policy and the country’s economy has so far been “fruitful.” 

“We have strengthened our political setting. A balancing period in the economy has restarted,” Şimşek tweeted on May 30, announcing the messages delivered to investors in the meetings that Central Bank Chairman Murat Çetinkaya also attended.

“The most important priorities are the inflation and the current account deficit,” the tweet said.

Şimşek also said structural reforms would be expedited following the snap presidential and parliamentary elections scheduled on June 24.

The meeting—their second this week—came as a response to the Turkish Lira’s 20 percent tumble this year over various concerns, including the unstable political environment in the country.

The duo came together with leading bankers and investors in Istanbul late on May 27 to ease an ongoing pressure over the Turkish currency.

Şimsek said late on May 28 that he and Çetinkaya would meet 90 portfolio managers, bank executives and analysts in groups between 7 a.m. (06:00 GMT) and 10 p.m. in London.

“We are making intensive efforts for Turkey’s positive decoupling with our decisive police steps, good communication and our strong long-term story,” Şimşek wrote on Twitter.

Meanwhile, bankers who attended the Istanbul meeting on May 27 said Şimşek’s comments focused on the government’s achievements and plans, stressing fiscal discipline, tight monetary policy and its commitment to the market economy.

He said in similar comments last week that Turkey would not try to push back against financial markets.

“We understand the concerns of the market. We understand the worries that investors might have,” he told broadcaster NTV.

“We took the necessary steps to address these concerns and we will continue to do so,” he added.

He is expected to give similar messages to investors in London to boost investors’ confidence.

Early on May 29, the lira was at 4.5650 to the dollar, firming from a close of 4.58, when it had racked up its best one-day performance in 16 months on the Central Bank’s announcement it would return to a single policy rate.

Last week, it hit a record low of 4.9290, prompting an emergency Central Bank hike in its highest rate by 3 percentage points to 16.5 percent.

The lira weakened later on May 29 to 4.6215 per the dollar, giving up some gains from the previous session amid a global financial strain due to political worries in Italy. Despite this, the lira became one of the best performing emerging currencies.

On May 28, the Central Bank said the repo rate would be set at 16.5 percent and would once again be regarded as the main rate under a new framework taking effect on June 1.

The bank has for years used multiple rates to set borrowing costs, creating a complex system that economists say has made policy less predictable.