Deputy PM Ali Babacan said on Friday (Jan 24) at a panel in Davos that the recent volatility in the Turkish markets was basically a re-pricing process due to U.S FED’s tapering and local political developments.
This volatility is temporary, the Central Bank is taking the necessary steps and there has not been an exodus of capital, Babacan said, adding that the government is also moving to reduce the political tension.
However, TRY hit a new record low on Friday despite the Central Bank’s direct intervention in the forex market on Thursday by selling USD. Bankers said the Bank sold around USD 3bn on Thursday and the Bank’s net forex reserves are less than USD 40bn.
Revising its forecasts is not on the government’s agenda, Babacan also said, reiterating that the Turkish economy will grow 4% this year and current account deficit is expected to fall.
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