‘Turkish central bank will continue tightening money’

The Turkish central bank will continue to tighten money until the long-term inflation target of 5% is reached, the governor said in a joint broadcast of prominent TV channels late on Friday.

Pointing to an interest rate above the inflation rate, Sahap Kavcioglu said he will focus on reducing inflation.

The central bank will take measures for credit expansion while setting a balance sheet for households, the real sector and investors, he stated.

Asked about an alleged $ 128 billion deficit in the central bank’s foreign exchange reserves, Kavcioglu said the claim was untrue.

He remembered the coronavirus pandemic crisis suddenly appeared in 2020 and countries closed their doors.

Portfolio investment declined worldwide and Turkey’s share was certainly reduced, Kavcioglu noted.

He also recalled that economic measures to combat the pandemic amounted to $ 16 trillion, and budget extensions from central banks reached $ 10 trillion.

At the end of 2020, the real sector deficit on the currency position was $ 208 billion, but it fell to $ 157 billion. This was met by reserves or transactions from the central bank, he said.

If the central bank had not met the demand for foreign currency during the pandemic, the country would face difficulties, he said.

He mentioned the foreign capital outflow, and emphasized: “We can discuss various topics in Turkey, but everyone knows that they can take their money to Turkey or withdraw from Turkey whenever they want.”

He added that Turkey wants to make the reserves permanent and better implement a system that finances production and exports.

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