Turkey Finance Minister Says Lira Competitive at Current Levels

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(Bloomberg) -- Turkey’s lira “looks competitive” at around 5.70-5.90 against the dollar, Treasury and Finance Minister Berat Albayrak said in an interview with Nikkei newspaper.

“When we look at the developments in imports and exports as well as balancing in the current account, the foreign-exchange rate looks competitive,” Albayrak said in response to a question from the newspaper on whether he was was satisfied with the lira’s recent trading range.

The currency was trading at 5.9338 per dollar as of 11:11 a.m. in Istanbul, compared with a close of 5.8862 a week ago.

Albayrak’s comments come just days after he said Turkey needed a “more competitive” lira, fueling speculation that he was calling for weaker currency. Turkey’s balance of payments swung to deficit in November after a more stable lira paved the way for a pick-up in consumer demand and imports.

Last year, the lira depreciated 11.1% against the dollar, less than headline inflation. That amounts to a real appreciation of the currency and is a headwind for exporters.

Responding to another question on whether dollar sales by state banks was a way of stabilizing the lira, Albayrak said: “Within free-market rules, state banks pursue both the public interest as well as profitability, and this will continue as such.”

Turkish state banks have been selling dollars to prop up the lira since last year, especially in times of heightened volatility.

Albayrak also brushed aside concerns about the central bank’s independence. “I do not deem any of the criticism coming on that matter as noteworthy,” he said.

©2020 Bloomberg L.P.

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