Turkish Finance Minister Berat Albayrak
Turkish Treasury and Finance Minister Berat Albayrak on Friday unveiled a new economic model for the short and long term.
“This approach will be based on a strategic mentality. Establishing trust and communication with all market actors will be one of the principles of the new economic approach.”
He stated that the new economic model will be decisive and target change in addition to the new approach being sustainable.
President Recep Tayyip Erdoğan on Friday called on Turkish citizens to convert their foreign exchange savings into liras."Anyone who has dollars, euros, or gold underneath their mattresses should go to the bank and convert them into Turkish liras," Erdoğan told a rally in the northeastern Bayburt province.Erdoğan called such moves part of a "national struggle.""This will be my people's answer to those who declare economic war against us," he added.Central bank independence critical to Turkey's economy: FinMinErdoğan also said Turkish people should not worry, saying: "We also have measures to guard against all negative possibilities."Criticizing what he called the "interest lobbies," he added that they cannot "overthrow" Turkey.Erdoğan said the "waves of artificial financial instability" Turkey is being subjected to ignore its economic strength, as it faces "not a single problem" in macroeconomic data, producing power, or its banking system
Erdoğan urges citizens to convert foreign currency
“Restoring the budget balance and improving its quality is a key principle of the new approach,” said Albayrak, adding that a tight monetary and fiscal policy also established the fundamentality of the model.
“The independence of our central bank is extremely critical for our economy.”
Stating that Turkey would prioritize structural reforms, “The first step of the new approach is economic balancing,” he said and emphasized stronger budget discipline.
The next steps will be lowering Turkey’s current account deficit and improving trust, Albayrak added.
New regulation authority
"Turkey will establish a new finiancial regulation authority."
Turkish Treasury and Finance Minister Berat Albayrak is set to announce on Friday a "framework for a new economic model", the ministry announced on Thursday. The new set of economic steps are aimed at securing an economic growth of 3-4 percent in 2019 and decreasing the inflation rate to single-digits, the ministry said in a press release."It is expected that current account deficit would be balanced around 4 percent," the ministry said.The ministry added that it will continue to take steps to cut the budget deficit to around 1.5 percent of the country's GDP."The Treasury's debt rollover ratio to be reduced below 100 pct," the ministry said.The statement also mentioned the ministry targeted a non-interest surplus of 5 billion Turkish liras ($927.3 billion) by end of 2018 through savings and income-generating measures.The Turkish banking system is capable of managing financial fluctuations effectively thanks to its strong capital structure and balance sheet, according to the ministry statement. Contrary to speculations, Turkish banks and companies face no problems in terms of currency and liquidity, it said.It added: "Until the end of the year, our main goal will be to meet these targets by taking action with regard to fiscal policies."
Turkey to reveal 'new economic model' on Friday
"Turkey will emerge stronger from this period," concluded Berat Albayrak.
Trump doubles tariffs
As Albayrak was giving his speech, U.S. President Donald Trump announced on Twitter that he had doubled steel and aluminum tariffs on Turkish imports.
"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!" he wrote.