Turkish Deputy PM Mehmet Simsek Says Inflation May Peak in Upcoming Months

By Staff Writer On Jun 1, 2018

Prices of basic goods in Turkey's market are on the rise. (Photo: Turkish media)

Turkey’s Deputy Prime Minister Mehmet Simsek, responsible for economic affairs, said on Friday that the inflation may peak in upcoming months and vowed to adopt a mixed policy approach to tackle economic problems in the aftermath of June 24 elections.

“Latest PMI print shows that rebalancing is underway. Exports of goods & tourism should remain supportive of economic activity. Hence, current account deficit, ex gold, is likely to have peaked. Inflation is looks set to peak in a couple of months. We’ll strengthen policy mix,” he wrote on Twitter.

Latest PMI print shows that rebalancing is underway. Exports of goods & tourism should remain supportive of economic activity. Hence, current account deficit, ex gold, is likely to have peaked. Inflation is looks set to peak in a couple of months.

We’ll strengthen policy mix… https://t.co/KRrHQDKMNi

— Mehmet Simsek (@memetsimsek) June 1, 2018

The Turkish lira is struggling against foreign currencies. It recently plunged into historic lows against the U.S. dollar and Euro until Central Bank stepped in to arrest its decline.

Last week, Central Bank raised interest rate 300 basis points, and increased benchmark lending rate from 13,5% to 16,5%. The lira rallied after the intervention and bounced back from 4.92 to 4.55 against the U.S. dollar. The lira again tumbled to 4.74 last Friday.

As of Friday, a U.S. dollar is traded in exchange of 4.65 Turkish lira.