Turkish Finance Minister: Authorities do not set targets for lira to dollar exchange rate

The Turkish authorities do not set targets for the exchange rate of the Turkish lira to the dollar, the rate has been allowed to float freely, Turkish Finance Minister Mehmet Simsek said in an interview with NTV, Report informs.

“We don’t have any goals for the exchange rate, and there’s no point in making any forecasts either. We have developed a medium-term program, it may be subject to changes,” he said.

The minister repeated the authorities’ goal to reduce inflation to single digits, but noted that a decline in indicators is expected no earlier than the second half of 2024, at the same time it will be possible to talk about the beginning of a reduction in the Central Bank rate.

The minister also said that the authorities intend to reduce the volume of lending to the population.

“There will be no changes regarding the acquisition of the first property on loan. However, if a citizen buys a second, third apartment or a house at a resort, then we will not provide him with credit support if he has his own opportunities for purchase. We will seriously limit lending in this area,” the minister noted.

Türkiye's central bank said in June it would continue to gradually tighten monetary policy until the inflation outlook improves significantly. The regulator raised the inflation forecast for the end of the year to 58% from the previous estimate of 22.3%, Central Bank Chairman Hafize Gaye Erkan said at the end of July. In June, the Central Bank raised the key rate for the first time in more than two years - to 15% from 8.5%, and in July continued the increase, bringing it to 17.5%.