ECONOMY

Turkish trade minister wants ‘speculators’ out of FX market

ANKARA – Turkey’s foreign trade minister yesterday expressed worry at the impact of a strengthening Turkish lira on exports and urged the central bank and treasury to protect the currency from «speculators.» The prospect of $12 billion in new IMF loans, on which an agreement was finally signed on Monday, has helped the lira appreciate in recent months from October lows around 1,600,000 to the dollar to around 1,300,000 to the dollar yesterday. As the currency strengthens, so Turkish exporters lose much of the advantage they gained from a crisis lira flotation early last year. Export-led growth is a crucial part of plans to extricate the economy from crisis and recession. «Already the January figures show a slight slowdown in exports,» Foreign Trade Minister Tunca Toskay, a member of the nationalist wing of Turkey’s coalition government, told Reuters in an interview. «I’ll tell you what has to be done in this position,» he said. «We have to stop the exchange rate being under the influence of speculators. The central bank and treasury have to find and show the means for doing this, in harmony with the (IMF) program,» he said. A strong lira helps Turkey’s fight against inflation, as it helps reduce the cost of crucial imports, particularly oil. But Toskay’s comments reflect growing concern, particularly among exporters, at their eroding price advantage in European and other markets. Economy Minister Kemal Dervis, too, has expressed concern at the strength of the lira and said the central bank was able to buy up foreign currency in order to stabilize the lira. But the bank has so far taken no such action and the lira’s slow but steady appreciation has continued. «The lira has started to appreciate….In a market that is so shallow that it is possible to play with the exchange rate, saying ‘Hang in there, in the end you will get used to a floating rate’ does not match reality,» Toskay said. Economy Minister Kemal Dervis, too, has expressed concern at the strength of the lira and said the central bank was able to buy up foreign currency in order to stabilize the lira. But the bank has so far taken no such action and the lira’s slow but steady appreciation has continued. «The lira has started to appreciate….In a market that is so shallow that it is possible to play with the exchange rate, saying ‘Hang in there, in the end you will get used to a floating rate’ does not match reality,» Toskay said.