Şimşek: “As Inflation Falls, Interest Rates and Credit Costs Will Also Decrease”

Minister of Treasury and Finance Mehmet Şimşek provided an update on Türkiye’s economic program during a meeting with the Board of Presidents of the Turkish Exporters Assembly (TİM), where he also addressed concerns about the exchange rate and inflation. Şimşek emphasized that as inflation declines, interest rates will follow suit, leading to lower credit costs.

Key Takeaways from the Meeting

The well-attended meeting saw the participation of Hatice Karahan, Deputy Governor of the Central Bank and a former advisor to TİM. Sources speaking to DÜNYA noted that Minister Şimşek acknowledged concerns about exchange rate levels but stressed the importance of managing inflation risks.

While exporters voiced their demands regarding currency valuations, Şimşek reiterated that maintaining economic stability remains the priority. He assured that exporters would continue to receive support through rediscount and other credit mechanisms. However, exporters left the meeting with the understanding that their expectations regarding the exchange rate would not be met due to inflationary pressures—a message they understood, albeit reluctantly.

Long-Term Perspective on Exchange Rates

A food sector exporter, also speaking to DÜNYA, highlighted that Minister Şimşek remains committed to the ongoing economic program without deviation:

“Minister Şimşek is acting exactly as a Finance Minister should. We have seen that he will not compromise on the economic program. Instead of short-term expectations regarding the exchange rate, we need to focus on the long term. By the end of 2025, we expect inflation to ease further, especially after mid-year. Except for a few minor concerns, most participants agreed with Minister Şimşek. We have witnessed the consequences of short-term decision-making, which is why his approach provides predictability.”

Source: Dunya.com