Turkish finance minister says gov't 'unconcerned' about dollar's rise, would curb it 'if it wanted to'

Turkish Finance Minister Berat Albayrak has said it was possible to curb the rise of foreign currencies through interest rates but the government did not prefer this method because of “concern that a rate hike will decrease production and employment.” “We are not interested in the [rise of the] dollar, we would have it fall in value if we wanted to. You would increase the interest rates and it would fall, but this is not our concern,” Albayrak reportedly told ruling AKP lawmakers.

Saturday November 07 2020 03:44 pm

Duvar English

Turkey's Finance Minister and President Recep Tayyip Erdoğan's son-in-law, Berat Albayrak, has said Ankara would intervene to support the record-low lira currency "if it wanted to" but is not currently "concerned" about its plunge.

“There are many reasons behind the dollar's rise: uncertainties in the world, the U.S. elections, the pandemic, problems between countries. All these cause the dollar to rise in value. But we are not interested in the [rise of the] dollar, we would have it fall in value if we wanted to. You would increase the interest rate and it would fall, but this is not our concern,” Türkiye newspaper quoted Albayrak as saying during a meeting with ruling Justice and Development Party (AKP) lawmakers.

Albayrak said that higher interest rates would hurt employment, adding he expected the lira to stabilize after a while. “There are both advantages and disadvantages to increasing the interest rate. If the interest rate increases, the production would decrease, employment would decrease. Our purpose here is to lower the imports and increase the production...We expect the volatility in the exchange rates to stabilize in a couple of months,” he said.

Meanwhile, Erdoğan removed the central bank governor from his post on Nov. 7 and replaced him with former finance minister Naci Ağbal.

The decision to replace Murat Uysal as governor was made by presidential decree, which was announced in the country’s Official Gazette. It was not immediately clear why Uysal had been replaced.

The lira closed at 8.5445 against the dollar on Nov. 6 after a touching record low of 8.58, despite dollar weakness as votes were still being counted in the U.S. election.