Turkish Finance Minister Nureddin Nebati has said that the government has chosen to expand the economy rather than taking measures to tackle soaring inflation.
“We could have increased the interest rate to decrease the exchange rate but then production would have been affected adversely. This has led to a parting of ways. We have chosen to grow together with inflation. Otherwise, we could have taken very harsh measures to reduce inflation. We would have increased the interest rate very much. But then production would have stopped,” Nebati reportedly said during a meeting of the ruling Justice and Development Party (AKP) at the weekend, according to reporting by Hürriyet daily columnist Abdulkadir Selvi.
Turkey's lira slid to beyond 16.55 against the dollar on June 6, bringing its losses to more than 20% this year, due to concerns about a surge in inflation to a 24-year high and Nebati's promise that the interest rate would remain steady.
The lira shed 44% last year and has been the worst performer in emerging markets for several years running due largely to economic and monetary policy concerns under President Recep Tayyip Erdoğan's government.