Statement on Floating Exchange Rate from Minister Şimşek
Treasury and Finance Minister Mehmet Şimşek emphasized that specific economic conditions must be met during the transition process to a floating exchange rate regime.
In statements made in Ankara, Treasury and Finance Minister Mehmet Şimşek stated that transitioning to a floating exchange rate requires lower inflation rates, anchored expectations, and two-way mobility in the foreign exchange market.
Conditions Required for Floating Exchange Rate
Treasury and Finance Minister Mehmet Şimşek evaluated the transition process to a floating exchange rate and stated that ideal conditions must be established.
Şimşek emphasized that, in this direction, there is a need for a lower inflation rate and solidly anchored inflation expectations.
Foreign Exchange Market and Program Assumptions
Minister Şimşek pointed out the importance of seeing two-way mobility in the foreign exchange market and conveyed that inflation is still hovering at high levels.
He stated that a neutral real exchange rate assumption is always made when preparing the Medium-Term Program and that no predictions are made regarding the exchange rate.
Inflation Targets and Iran Trade
Şimşek expressed that they trust the central bank models regarding the 21 percent inflation target set for the end of 2027.
Additionally, he said that Turkey takes into account the US Treasury Department's statements regarding doing business with Iran, that no natural gas payments are made to Iran, and that the money is kept in a tightly audited account.