Turkey keeping interest rates steady for now, finance minister says

Turkey’s central bank is keeping monetary policy tight “at the moment”, Treasury and Finance Minister Lütfi Elvan said.

Elvan spoke to the CNN Türk news channel on Thursday, hours after the central bank decided to keep interest rates steady at 19 percent, matching economists’ expectations.

Turkey’s monetary policymakers are keeping interest rates elevated after annual inflation accelerated to 17.1 percent in April, the highest level in almost two years, from 16.2 percent in March.

Combating inflation is the government’s number one priority to achieve macro-economic stability and sustainable growth, Elvan said.

"You cannot solve this problem only with monetary policy. In public finance, we have given the necessary support to our central bank, particularly on price stability, since the day I took office. Nobody should worry about that, " Elvan said.

The minister said the government was following growth in bank loans closely. Consumer loans were growing at a faster pace than commercial loans, but the government wants the lending to create more investment, production and exports, he said.

"If necessary, we can take macro-prudential measures," he said.

Elvan replaced Berat Albayrak, President Recep Tayyip Erdoğan’s son-in-law, as treasury and finance minister in November. Albayrak resigned after Erdoğan replaced the governor of the central bank and the lira dropped to a record low.