Turkey says lira's value competitive, state-run banks support stability

Turkish Treasury and Finance Minister Berat Albayrak indicated that the government is satisfied with the current value of the lira against the dollar.

Albayrak was responding to a question from the Nikkei newspaper about whether he saw the lira as competitive at levels between 5.7 and 5.9 per dollar. The currency traded at 5.92 on Friday.

"When we look at the developments in imports and exports as well as balancing in the current-account deficit, the foreign exchange rate looks competitive,” Albayrak said in an interview published on Friday.

Turkey’s lira slumped against the dollar after a currency crisis in the summer of 2018, losing 28 percent of its value that year and a further 12 percent in 2019. The lira has traded at between 5.68 and 5.98 per dollar since October.

Albayrak said on Monday that he wanted “a more competitive lira”, without providing further details, raising speculation among investors that the government sought a weaker value for the lira to support exports and hence economic expansion. Growth in exports has been lagging that of imports, according to recent official data.

Turkey’s government has used dollar selling by state-run banks to help bolster the currency in recent months, seeking to stave off lira weakness caused by political tensions with the United States and hostilities between Washington and Iran.

Albayrak said financial stability was a matter of national security for Turkey. Asked about state-run bank intervention in the currency markets, Albayrak said:

"With the presidential system change in 2018, all state banks, private banks, central bank and other institutions started to become much more active market players in this new structure as strong stakeholders and acting in a more harmonious and coordinated fashion for financial stability."

He said that "within free market rules, state banks pursue both the public interest as well as profitability and this will continue as such."

https://asia.nikkei.com/Editor-s-Picks/Interview/Turkey-s-powerful-finance-minister-says-worst-is-over-for-economy