Turkey won't prioritize high interest rates: New Finance Minister

Türkiye Materials 2 December 2021 22:05 (UTC +04:00)
Turkey won't prioritize high interest rates: New Finance Minister

Turkey will not prioritize high interest rates under the new economic model, the newly appointed treasury and finance minister Nureddin Nebati said Thursday, Trend reports citing Daily Sabah.

“Our priority will not be high interest rates but investment and employment,” Nureddin Nebati told a handover ceremony in the capital Ankara after being sworn in as new treasury and finance minister.

Nebati echoed a new economic model based on lower interest rates, which is being endorsed by President Recep Tayyip Erdogan, who says the new policy direction will boost production, jobs, exports and growth.

Nebati said the new economic management will take steps to ensure a predictable market and economy.

Having served three years as a deputy finance minister, Nebati was appointed to the top post after his predecessor Lütfi Elvan stepped down early Thursday.

The announcement in the Official Gazette said Elvan asked to be “pardoned from the job” and that his request was accepted.

“We have taken very important steps during our tenure. We have never given up on financial discipline,” said Elvan, addressing the ceremony alongside Nebati.

“We have had a successful year in terms of borrowing. Despite the high growth performance, we have achieved significant improvements in the current account balance.”

Elvan, a former deputy prime minister and longtime member of the ruling Justice and Development Party (AK Party), held the finance post for just over a year after having replaced Berat Albayrak.

Nebati, 57, studied international relations, political sciences and public administration, according to his resume on the ministry's website.

Nebati last week praised Erdogan’s drive to bring down borrowing costs and said that Turkey had sought for years to implement a policy of low rates but had faced strong opposition.

“This time, we are determined to implement it,” he wrote on Twitter, adding that there was “no problem” with keeping interest rates low in current market conditions.

The Central Bank of the Republic of Turkey (CBRT) has cut rates three times since September, slashing 400 basis points from its benchmark policy rate to bring it down to 15% and is widely expected to lower it again this month. Inflation, on the other hand, neared 20% in October.

Turkey aims to log a current account surplus by supporting manufacturing, exports and employment, Nebati said Thursday.

“We have left the peak period of the pandemic behind with great success. We have guided the process with proactive economic policies. Turkey has become one of the fastest recovering countries during the pandemic,” he noted.

He said the new management will seek to trigger an increase in investment, production and export, in addition to boosting employment and wages, and look to eliminate chronic issues such as the current account gap and foreign debt.