Turkey should commit to sound economic policies to promote stability and reduce imbalances at a time of market volatility, an IMF spokesperson said on Wednesday as a row between Washington and Ankara over the jailing of a US pastor dragged on.
There is no indication that Turkish authorities are considering asking for financial assistance from the Washington-based fund, said the spokesperson, speaking on condition of anonymity
The IMF is monitoring the situation closely, they added.
“In light of recent market volatility, the new administration will need to demonstrate a commitment to sound economic policies to promote macroeconomic stability and reduce imbalances, while ensuring full operational independence to the central bank to pursue its mandate of securing price stability,” she said.
The Turkish lira has lost nearly 40 percent against the US dollar this year, driven by worries over Turkish President Tayyip Erdogan’s growing control over the economy and his repeated calls for lower interest rates, despite high inflation.
The latest blow was sparked by sanctions imposed on Turkey by US President Donald Trump’s administration over the detention of Andrew Brunson, a pastor who was jailed for allegedly supporting a group that Ankara blames for an attempted coup in 2016.
The weakness of the Turkish currency has rippled through global markets.
The lira rebounded yesterday after Qatar on Wednesday pledged US$15 billion in investment to Turkey, which is to be channeled into banks and financial markets, a Turkish government source told reporters.
The move by Turkey’s Gulf ally offered further support to a lira rally, after the Turkish central bank tightened liquidity and curbed selling of the currency.
Turkish Minister of Finance Berat yesterday tried to soothe the markets over the lira’s fall, with a international conference call with thousands of investors.
About 3,000 investors from the US, Europe and Asia registered to join the conference call, the state-run Anadolu news agency reported.
Albayrak, Erdogan’s son-in-law, was appointed last month.
“This is Albayrak’s last chance to prove three things: that he understands what is happening, that he can react accordingly and that he has influence over Erdogan,” a European diplomatic source said on condition of anonymity ahead of the call.
Additional reporting by AFP
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