Turkish finance minister says rise in energy prices accelerating inflation By Reuters



ISTANBUL (Reuters) – Turkish Finance Minister Nureddin Nebati said on Saturday the global rise in energy prices was accelerating inflation in the country, but Ankara would continue working to lower it, adding that the lira’s recent decline was within “acceptable” levels.

Inflation hit 54% in February and economists expect it to continue rising towards 70% in coming months, after Russia’s invasion of Ukraine sent commodity prices soaring and knocked the lira.

Speaking at a business conference in the southern resort of Antalya, Nebati said a government-backed scheme that protects lira deposits against depreciation had helped eliminate concerns over what he called “attacks” on the lira’s exchange rate.

“What we have seen in recent months is that the exchange rate is stable and moves forward within acceptable limits,” he said.

The lira is down 11% against the dollar this year, mainly due to the economic fallout from Russia’s invasion of Ukraine.

The currency had declined 44% last year, mostly after a series of rate cuts, long sought by President Tayyip Erdogan, which sparked a currency crisis and sent inflation to a 20-year high.

The lira protection scheme as well as costly forex market interventions by the central bank helped stem the currency crisis in December.

The central bank cut its policy rate by 500 basis points to 14% between September and December but has kept it unchanged at the last three meetings.

Erdogan’s new economic plan prioritizes a current account surplus, exports, credit and growth, while keeping interest rates low.

However Russia’s actions in Ukraine, which it terms a “special operation”, risk widening Turkey’s current account deficit, due to rises in commodity prices and a potential decline in tourism revenue.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy / sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Comment