Finance Minister ?im?ek upbeat on Turkiye's net reserves

By News Centre

Turkiye's Minister of Treasury and Finance, Mehmet ?im?ek, stated that as of December, Turkiye has met international standards for reserve adequacy.

"Last year, reserves were a major concern, but they are no longer an issue," he said.

Speaking at the IICEC Conference organized by Sabanc? University's Istanbul International Center for Energy and Climate (IICEC), Minister ?im?ek discussed Turkiye's current account deficit and reserve balances. He noted, "Last year, reserves were a major concern, but they are no longer an issue. Turkiye's net reserves have reached approximately $50 billion. This is a significant figure, with the peak being $70 billion in 2011. At the beginning of 2018, it was around $38 billion. We will continue on our path with healthy, rational, and correct policies. As of December, we have achieved reserve adequacy according to international standards."

?im?ek emphasized the continuation of rational policies in the economy, stating, "Under the program, we have reduced the Currency Protected Deposit (KKM) accounts by $110 billion, and this exit will continue."

He further mentioned that there are no issues in accessing external financing: "Turkiye has a serious inflation problem and a cost of living issue, but the main goal of this program is to ensure price stability. For this, monetary policy, fiscal policy, structural policies, income policies, and policies on managed and directed prices will all support disinflation in 2025. You may say inflation is high in 2024, which is true, but at the beginning of the year, inflation was at 65%. If we close the year at 44-45%, it will be a nearly 20-point decrease, and this is not a bad decline." ?im?ek also noted that the rigidity in service inflation is beginning to resolve and the process of reducing inflation is ongoing. He added, "We value the expectations of the market, households, and the real sector. Household expectations are clearly high, but there is a decline. We ask the real sector what inflation will be in 12 months. They say '48%,' and the year-end is already 44%. It is significant that the real sector thinks this way."