Turkish Vice President: Our Foreign Currency Needs Have Decreased

Vice President Cevdet Yılmaz stated, “There has been a speculative atmosphere created in recent times. Nobody should pay attention to that; the numbers speak for themselves. Our need for foreign currency has decreased. Our access to foreign currency has increased. There is no doubt about it.”

During his visit to Kocaeli Governorship within the scope of his contacts, Vice President Cevdet Yılmaz was welcomed by a police band. After signing the honor book, Yılmaz received information from Governor Seddar Yavuz about the work in the city.

Later, attending the Kocaeli Business World Meeting held at the Kocaeli Congress Center, Yılmaz stated that in the last 3-4 years, growth and trade have been below historical averages worldwide.

Yılmaz mentioned the COVID-19 pandemic and the subsequent recovery processes, explaining that the tight monetary policies implemented by countries against inflation caused a contraction in growth and trade.

Stating that the Ukraine-Russia war has affected the whole world and the global economy, Yılmaz also pointed out distressing scenes in the Gulf, especially the events in Gaza. He also noted that in addition to these, earthquakes occurred last year in Turkey, particularly centered around Kahramanmaraş, and they are trying to heal the wounds caused by the disaster.

Yılmaz emphasized the need for a growth composition that does not support inflation but rather supports disinflation. He expressed a desire for a relative decrease in the share of consumption expenditures and for investment and exports to contribute more to growth. Yılmaz stated that there are positive developments in this regard, mentioning an increase in fixed capital investments by 10.7% in the last quarter of the previous year and a 14% increase in machinery and equipment investments. He pointed out that these are indeed positive figures indicating that investment has a greater share in our growth and national income. He also noted that consumer spending, after a certain period, experienced single-digit growth for the first time. Although consumption remains high, it has at least dropped to single digits.

“Disinflation Process Will Begin”

Yılmaz emphasized their determined struggle against inflation and the updating of their policies, stating:

“However, we must also honestly say this; the struggle against inflation takes some time worldwide. This is not something unique to us. Lowering inflation to a certain level takes time. We started this struggle right after forming the government and after the May elections. We started to see its effects on a monthly basis at this point. January and February were slightly above our expectations for this year. Indeed, our Central Bank immediately took a position on this matter, implemented some tightening measures, and immediately took measures to return to our path.”

Yılmaz stated that the annual decline would occur around June-July, and a significant decline would be observed in the second half of the year. He said, “The disinflation process will begin. Our target in our Medium-Term Program for 2025 is around 15% inflation, and by 2026, we will return to single-digit inflation rates. We’re not saying this just for the sake of it. We have created the plan, program, and policy set for this. We are implementing this decisively. Together, we will see the results.”

Yılmaz underlined that Turkey’s foundations are solid, stating, “Nevertheless, there has been a speculative atmosphere created in recent times. Nobody should pay attention to that; the numbers are there. Our need for foreign currency has decreased. Our access to foreign currency has increased. There is no doubt about it.”

Yılmaz emphasized that the banking system is robust, with a strong capital structure. Mentioning that the non-performing loan ratio is also low, Vice President Yılmaz said:

“With all these effects, you have been witnessing a decrease in credit risk premiums in CDS in recent periods. There are also positive developments and steps in the evaluations of credit rating agencies regarding Turkey. Fitch recently upgraded one notch and turned its outlook positive. This indicates that this will continue in the future. This indicates that these credit rating upgrades will continue. We also achieved a significant decrease in the Currency Protected Deposits (CPDs) known as KKM. It had reached its highest level in August last year. It was around 3.4 trillion liras, and now it has decreased to 2.3 trillion liras. So, there is a decrease of around 1.1 trillion liras in CPDs, hence, there is a positive development.”

Despite the impact of the earthquake, Yılmaz stated that they managed to keep the budget deficit at a very good level, explaining how they managed the budget well with the measures they took and sharing numerical data.

Yılmaz stated that they will continue their path more strongly in the coming period, saying, “In some circles, attempts are being made to create an atmosphere based on local elections as an excuse. No one should pay attention to them at all. We had general elections last year. Our people elected our President, our Parliament. The Parliament has a majority in the People’s Alliance. Our President also received a new term of 5 years. Therefore, elections are general elections concerning macro policies, national policies, general economic policies. Those elections were held and completed. If we were having general elections, maybe these discussions would make sense. A discussion about what policies will be after the general election… But we are not having general elections now; we are having local elections. Local elections are known as elections concerning our people’s local, common services. They are elections concerning the fundamental services of our cities. Attaching any meaning beyond this to these elections and discussing macro policies is not a correct approach. I especially want to emphasize this.”

“Improving the Business and Investment Environment”

Yılmaz stated that they provide support to investors and exporters in accessing credit and finance, stating that they structure policies accordingly.

Mentioning the support they provide to exporters and investors, Yılmaz said, “While ensuring disinflation on one hand, we never neglect the investment, employment, production, and export quartet that our President always emphasizes. For the permanent social welfare of our people, we continue our policies in a stable and sustainable growth manner. We are taking various steps, including Investment Environment Improvement Coordination Board action plans, to improve the investment environment. We are improving the business and investment environment.”

Yılmaz, sharing the investments made in Kocaeli with figures, expressed that step by step they will take the country to very different points with the vision of Turkey Century, and Kocaeli will be one of the leading provinces of this century.

Ayhan Zeytinoğlu, Chairman of the Board of Directors of Kocaeli Chamber of Industry, also provided information about the contributions of Kocaeli to the Turkish economy.

Following the speeches, Yılmaz answered the questions of the industrialists in the closed-to-press meeting.

source: prepared by Melisa Beğiç

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