Turkish Finance Minister Mehmet Simsek indicated on Monday that "the government will continue to tighten monetary policy to help the central bank reduce inflation," highlighting Fitch's upgrade of the country's sovereign rating. Simsek stated, "Turkey is committed to maintaining appropriate policies and implementing structural reforms, while achieving price stability remains a top priority." He added, "The Central Bank of Turkey is committed to stabilizing inflation expectations by using all available tools. We will continue to tighten monetary policy to assist the Central Bank of Turkey in reducing inflation."
The inflation rate rose to 67 percent in February year-on-year, surpassing expectations and putting pressure to tighten monetary policy further. Economists anticipate inflation will decline to around 40 percent by the end of the year.
The lira experienced further declines during trading on Monday, reaching a new record low of 32.0075 against the dollar, bringing its losses since the beginning of the year to nearly eight percent. The upgrade from Fitch, raising Turkey's long-term foreign currency debt rating to B+ from B and the outlook to positive from neutral, reflects the strength of Turkey’s sound economic policies.
