FX.co ★ Turkey sets free lira’s exchange rate against dollar

Turkish Finance Minister Mehmet Şimşek said that the central bank had allowed the dollar/lira exchange rate "to be free". The economic targets are no longer linked to the US dollar rate as the lira is not keeping up with the US counterpart. Turkey’s officials stressed that it was not right to intervene in the exchange rate, setting target ranges for the local currency. "We don’t have any goals for the exchange rate, and there’s no point in making any forecasts either. We have developed a medium-term program, it may be subject to changes," Mehmet Şimşek said in an interview with NTV. The minister pinpointed that the primary goal was to bring inflation back to single digits, noting that a decline in indicators is expected no earlier than the second half of 2024. At that time, it will be possible to talk about the beginning of a reduction in the interest rate, according to Şimşek. The minister also reiterated that the authorities intended to reduce the volume of lending to the population. Against the background of financial difficulties, the residents of Turkey began to take more loans. "There will be no changes regarding the acquisition of the first property on loan. However, if a citizen buys a second, third apartment or a house at a resort, then we will not provide him with credit support if he has his own opportunities for purchase. We will seriously limit lending in this area," the minister noted. Şimşek added that the UAE planned to invest about $51 billion in the country, of which $27 billion aimed to support renewable energy projects. According to the minister, the World Bank will also provide an additional $18 billion to Turkey, bringing the aid package to $35 billion.