Turkish Deputy PM Babacan says Turkey is not facing crisis, no need for emergency measures.

By bne IntelliNews February 5, 2014

Turkey is not facing a crisis and the government should not be expected to take any emergency measures, Deputy PM Ali Babacan said on Wednesday.

But this does not mean nothing would be done, the government will do what is necessary, Babacan said, without elaborating on what these possible measures might be. The Deputy PM ruled out capital controls, saying that capital controls would mean suicide for the Turkish economy. Babacan’s televised comments came one day after PM Recep Tayyip Erdogan said on Tuesday in Germany that the government had plan B and plan C for the economy. On Tuesday, the PM once again reiterated his opposition to rate hikes, but said that the central bank was independent. Referring to the Central Bank’s decision to increase the interest rates, Erdogan said this was a temporary situation and the government would start to implement its plan B and plan C after or before the elections. The PM did not provide any details on government plans.

There may be some political noise until the March local polls and macro targets could be reviewed only after the elections if necessary, Babacan also said on Wednesday.

Energy costs have increased due to a weaker TRY but these costs have not so far been reflected in energy prices nonetheless this is not a sustainable situation; the government will monitor developments in the next two months, according to Babacan.

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