Foreign exchange fluctuations ‘temporary’ as dollar-lira parity already easing: PM Yıldırım

ANKARA

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Volatilities in foreign exchange rates will prove temporary and limited, and the dollar-Turkish Lira parity has already started to decline, Prime Minister Binali Yıldırım said in an address to his ruling Justice and Development Party (AKP) parliamentary group on Feb. 14.

“There is a downward trend of 7-8 percent in the exchange rate. The disastrous bells claiming that ‘we are sinking’ are now silent … The fluctuations in foreign exchange rates resulting from global turmoil are temporary and their impact will be very limited,” said Yıldırım.

He also added that the government had taken key steps to address exchange rate volatility “without crushing the real sector under the pressure of high interest rates.”

“We have closely followed the developments and taken the required precautions ... We will continue to take measures to increase employment and support the real sector,” he said. 

The dollar-lira parity has lowered from 3.9417, which it tested on Jan. 11, following liquidity steps taken by the Turkish Central Bank and various global improvements, trading below 3.65 on Feb. 14.

Yıldırım also mentioned the “employment mobilization” campaign launched by President Recep Tayyip Erdoğan in his speech, saying that the campaign would create 2 million new jobs.

“We will pay for unemployed people both in the public and private sector from the unemployment funds in order to not create a burden for employers. Some 500,000 people will be employed in this way,” he said.

“Each of the 1.5 million members of the Union of Chambers and Commodity Exchanges of Turkey [TOBB] has decided to employ one worker, which means that an additional 1.5 million people will find jobs. The new jobs will thus hit 2 million ... The private sector will only pay salaries. We will pay social security premiums and others for a one-year period,” Yıldırım added. 

The incentives for this package are estimated to cost 12.3 billion liras, almost 90 percent of which is expected to be met by the Unemployment Fund. With the support provided, the cost for an employer who employs a minimum wager will decrease by 773 liras to 1,404 liras. 

Yıldırım also added that the agricultural sector’s debts up to 1 billion liras to Ziraat Bank and Agricultural Credit Cooperatives have been restructured for a five-year period.