Turkish economy minister sees no need for Central Bank to intervene on lira

ANKARA

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Turkish Economy Minister Nihat Zeybekci has said he does not see a need for the Central Bank to intervene in the foreign-exchange market amid severe fluctuations in the markets.

The Central Bank should have cut interest rates before its monetary policy committee meeting in February, he said March 10 in comments during a televised interview.

The Turkish Lira has lost nearly 12 percent of its value against the dollar so far this year on expectations that the U.S. Federal Reserve will raise its interest rates, reducing appetite for riskier emerging-market assets, and government officials’ criticism of Central Bank policy after it did not rapidly cut its rates.

“We cannot say the Turkish Lira has lost value against the U.S. dollar [given] the overvaluation of the dollar against all currencies. I, therefore, see it as unnecessary for the Central Bank to intervene on the lira,” he said.

Zeybekci also said he did not want to give instructions to the Central Bank about its future rate decision, as the Central Bank is independent.

“I just believe there are many things to do with the rates and it is my right to say this as the economy minister. Turkey needs to grow by 5 percent and more on average annually,” he said, just before a critical top economy meeting in Ankara under the leadership of Prime Minister Ahmet Davutoğlu with the participation of the ministers from the economy administration as well as Central Bank Gov. Erdem Başçı.

“I do not believe that it is a must to take any steps regarding the interest rates or foreign exchange rates. I just believe we need to take some measures which will fuel production, employment and investments,” he said.