Mehmet Şimşek asks for patience from citizens again: We need time

The Turkish Lira continues to lose value due to high inflation, the cost of living, and the exchange rate breaking record after record.

Speaking to the Hürriyet newspaper, Treasury and Finance Minister Mehmet Şimşek asked for a little more time and patience regarding the negative trend in the economy.

Stating that the medium-term program is working, Şimşek said, "The steps we have taken have started to yield results. We will implement the program with patience and determination; we need time. There is no shortcut or easy solution, but when you look at the developments in many areas over the last few months, you will see that the program is working and that we are on the right track."

Şimşek emphasized that the predictable and rule-based policies implemented have increased Turkey's resilience against global economic fluctuations and have also allowed Turkey to differentiate itself positively among other countries.

Noting that price stability, fiscal discipline, and structural transformation stand out as the main goals, Şimşek said, "The implementation of this program has also inspired confidence internationally, and we have started to see concrete results. The decline in our risk premium, the momentum gained in international capital inflows, the increase in our reserves, and the decrease in exchange rate volatility are indicators of this success. The CDS, which shows our country's risk premium, was above 700 basis points in May and fell to 319 basis points as of December 13. While the CDS risk premium of 22 developing countries, including Turkey, decreased by an average of 74 basis points compared to May, our country's risk premium saw a decrease of more than 370 basis points, which is well above that."

"EXCHANGE RATE VOLATILITY HAS DECREASED"

Stating that exchange rate volatility has decreased, Şimşek also said that the credit rating outlook has improved.

Pointing out that banks and companies have also been active in international financial markets recently, Şimşek made the following assessment: "There is intense demand for issuances made by banks in international markets. While the external debt rollover ratio, including bonds, was 96 percent in the January-May period, this ratio rose to 141 percent in the June-October period. We see a similar picture when we look at the non-banking private sector. While the external debt rollover ratio, including bonds, was 74 percent in the January-May period, it rose to 109 percent in June-October."

KKM STATEMENT: 654 BILLION LIRA DECREASE

Noting that there has been an outflow from Currency Protected Deposit (KKM) accounts, Şimşek continued as follows:

"With the normalization in monetary policy, Turkish Lira returns have started to increase. The KKM stock was 3.3 trillion liras on August 25. As of December 1, this amount fell to 2.7 trillion liras. It decreased by 654 billion liras. Gross reserves increased. Since the end of May, it has increased by 41.7 billion dollars, reaching the highest level of all time with 140.1 billion dollars."

"WE ARE REVIEWING TAXES"

Stating that they are reviewing basic tax laws and will make the necessary reforms, Şimşek said, "We are carrying out our work under the headings of broadening the tax base and increasing the share of direct taxes, ensuring simplicity in taxation, removing ineffective exemptions, combating informality and increasing tax compliance, increasing tax security, and encouraging foreign exchange-earning activities. As we included in the MTP, we are reviewing all exemptions and deductions in our tax legislation."

"THERE WILL BE NO TAX INCREASES NEXT YEAR"

Şimşek underlined that there will be a strong disinflation starting from the second half of next year. He explained the reason as follows:

"Because we increased some taxes this July to heal the wounds of the earthquake. These increases will not happen next year. Efforts related to the earthquake increased the prices of products used in housing construction; we do not expect this effect next year. The delayed effect of monetary policy will come into play. The fiscal stance will improve and will be coordinated with monetary policy. Income policy will also be coordinated."