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AFP
ISTANBUL
TURKEY sought on Thursday to reassure investors rattled by the crash of the Turkish lira, insisting the country would emerge stronger and has no need of an IMF bailout.
Finance Minister Berat Albayrak, the son-in-law of President Recep Tayyip Erdogan, addressed hundreds of foreign investors from the United States to Europe and Asia via a conference call in a bid to soothe the markets as tensions with the United States continue to escalate.
The lira has over the last two days clawed back some ground -- after losing almost a quarter of its value on Friday and Monday -- but economists are warning Turkey must urgently address its economic imbalances to avoid more troubles ahead.
"Turkey will emerge stronger from these (currency) fluctuations," Albayrak was quoted by state-run TRT television as saying during the conference call.
Albayrak rejected any idea of seeking a bailout from the IMF, an option never seen as likely given Erdogan has always proudly boasted of paying off Turkey's past IMF debts in May 2013.
"There is no IMF plan, we have focused on attracting direct investments," said Albayrak.
The lira, which earlier this week traded at well over 7 to the dollar, held onto its gains during Albayrak's discussion, trading at 5.7 against the greenback.
"We will turn this crisis into an opportunity," said Erdogan's spokesman Ibrahim Kalin after a cabinet meeting chaired by the president, saying measures taken so far had helped bring about a"rapid improvement process" over the last two days.
But Albayrak faces a tough task in getting into order the economy which has been plagued by high inflation and a current account imbalance.
The lira has been sliding for months, and it accelerated as a result of a diplomatic standoff with NATO ally the United States over the detention by Ankara of an American pastor that has snowballed into one of the worst crisis in bilateral ties in years.
It turned into a rout last Friday when US President Donald Trump tweeted that his administration was doubling aluminium and steel tariffs for Turkey. The drop in the value of the lira will only fuel inflation, which is already near 16 percent.
Albayrak said there would be no concessions on fiscal discipline and said:"We are targeting lowering inflation into the single digits as soon as possible."
However, analysts say such measures are far from satisfactory and call for a sharp hike in interest rates -- strongly opposed by Erdogan's government which sees economic growth as its top priority.
"So far, Turkey does not seem to be changing its policies fast enough," Berenberg economist Holger Schmieding commented.
