Turkey’s Elvan Pledges Accountability to Woo Foreign Investors

Turkey will follow through its pledges to carry out economic and legal reforms, Treasury and Finance Minister Lutfi Elvan said on Tuesday, in an effort to lure much-needed foreign investment.

“We will solve every issue in line with market economy and in a transparent, accountable, rational and predictable way,” Elvan said in a message to members of the International Investors Association. “We will implement policies to boost credibility for investors. No one will be left with question marks in their minds.”

The pledges follow a dramatic change in policy making last month, after the central bank governor was fired by President Recep Tayyip Erdogan and the resignation of his son-in-law as finance minister. Both seats were filled by experienced, technocrat-minded officials.

Turkey’s Elvan Pledges Accountability to Woo Foreign Investors

The Turkish lira briefly trimmed losses after the statement and was down 0.2% at 7.8236 per U.S. dollar as of 11:23 a.m. in Istanbul. The currency weakened 24% against the dollar this year, the worst performance among 10 currencies tracked by Bloomberg in Europe, Middle East and Africa.

Turkey, which suffers from chronic current account deficits, is desperate to attract foreign direct investment, or FDI, which stood at less than 1.2% of gross domestic product in 2019, down from 3.7% in 2006, World Bank data show. FDI inflows totaled $4.3 billion in the first eight months of 2020, down 33% from last year.

Elvan said the government is determined to curb inflation, which accelerated past 14% in November. “Our monetary and fiscal policies will be coordinated,” he said.

The Turkish central bank’s Monetary Policy Committee, which boosted its benchmark rate by 4.75 percentage points last month, meets on Dec. 24 to discuss interest rates.

©2020 Bloomberg L.P.

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