Rise in dollar exchange rate should not be ‘exaggerated,’ says finance minister

MUŞ – Anadolu Agency

Turkish Finance Minister Mehmet Şimşek has dismissed concerns after the Turkish Lira-Dollar exchange rate reached a record low level in the last 10 years. DAILY NEWS photo, Emrah GÜREL

The sharp rise in dollar exchange rates in recent months should not be “exaggerated,” Finance Minister Mehmet Şimşek said a day after the Turkish Lira declined to 2 against the U.S. currency.
 
“In 2002 one dollar was around 1.6 liras. Today it is 2 liras. The rise in a period of 11 years is self explanatory,” Şimşek told reporters during his visit to the Eastern Muş province.
 
“[The fluctuations] are the result of the rise of an emerging currency. It is not particular to Turkey, we see this sort of rise and falls in most of the developing countries. The loss of value of India’s Rupee and Brazil’s Real since the beginning of the year is not less than the Turkish Lira’s,” Şimşek explained.
 
However, the latest exchange rate represents a record low level in the last 10 years. With the freefall of the lira, Turkey becomes one of the emerging markets most affected following the release of the Federal Reserve minutes indicating that its stimulus could soon be withdrawn.
 
Şimşek acknowledged that Turkey’s economy had been affected by the global fluctuations, however he dismissed any possibility of a potential crisis shaking the banking sector.
 
“Turkey is not an island, it’s an economy integrated to the world economy. Therefore Turkey can be affected positively or negatively by the developments in the world. This is more the consequence of the effect of a re-pricing of assets than a structural crisis,” he said, emphasizing that the foundations of Turkey’s banking sector were solid.
 
“There is currently no crisis in Turkey’s banking sector. It stands in perfect health, it is well administrated, supervised and monitored,” he assured.
 
The Turkish Central Bank is expected to apply more monetary tightening by not holding one-week repo auctions, halting funding from its policy rate and opening forex-selling auctions of at least $350 million.