Turkish finance minister briefs banking sector on new economic model

Istanbul

TURKEY'S Finance Minister Nureddin Nebati has briefed the country's banking association, the BDDK banking watchdog and state bank managers on the government's new low-rates economic model, the association said on Saturday (Dec 18), after the lira currency sank to record lows.

The lira fell beyond 17 to the US dollar on Friday after fears mounted of an inflationary spiral, brought on by President Tayyip Erdogan's policy in the face of soaring prices.

In a statement, the banking association said the goal of the meeting was to discuss "healthy, consistent growth", adding that developments in the banking sector, as well as the domestic and global economy, had been evaluated.

"Our banks will continue to use their resources to meet the financial needs of households and the real economy, within the free-market mechanism that operates with its rules," it said.

Despite criticism from economists and opposition lawmakers, Erdogan has pressed for the monetary easing to boost credit, exports and growth ahead of elections in 2023, prompting the lira to lose 55 per cent of its value against the US dollar this year, including nearly 40 per cent in the last month alone.

Earlier on Saturday, Turkey's biggest business group Tusiad called on the government to abandon the current monetary policy, urging a return to "rules of economic science". REUTERS