Turkey’s finance minister says rising energy prices are accelerating inflation By Reuters



ISTANBUL (Reuters) – Turkey’s Finance Minister Nureddin Nebati on Saturday said the global rise in energy prices is accelerating inflation in the country but Ankara will continue to work to bring it down, adding that the lira’s recent drop is within “an acceptable range”. “ Levels lie.

Inflation hit 54% in February and economists expect it to rise further to 70% in the coming months after Russia’s invasion of Ukraine sent commodity prices soaring and the lira plummeted.

Speaking at a business conference in the southern resort of Antalya, Nebati said a government-backed program protecting lira deposits from falling in value has helped ease concerns about what he called “attacks” on the lira’s exchange rate.

“What we have seen over the past few months is that the exchange rate is stable and moving within acceptable limits,” he said.

The lira has fallen 11% against the dollar this year, largely due to the economic fallout from Russia’s invasion of Ukraine.

The currency had fallen 44% over the past year, largely after a string of interest rate cuts long sought by President Tayyip Erdogan, sparking a currency crisis and sending inflation to a 20-year high.

The lira protection scheme as well as costly FX market interventions by the central bank helped contain the currency crisis in December.

The central bank cut interest rates by 500 basis points to 14% between September and December, but left them unchanged for the last three meetings.

Erdogan’s new economic plan prioritizes a current account surplus, exports, credit and growth while keeping interest rates low.

But Russia’s action in Ukraine, which it describes as a “special operation,” risks widening Turkey’s current account deficit due to rising commodity prices and a potential drop in tourism revenues.

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https://www.investing.com/news/economy/turkish-finance-minister-says-rise-in-energy-prices-accelerating-inflation-2787891 Turkey’s finance minister says rising energy prices are accelerating inflation By Reuters

Chris Barrese

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