Central Bank focuses on objectives: Turkish premier

ANKARA

The Turkish Central Bank is doing its job by focusing on monetary policies, financial stability and inflation targeting in line with its independent structure, Prime Minister Binali Yildirim said.

Yildirim's comments on Tuesday came after the bank rose its overnight lending rate -- the highest of the multiple rates it uses to set policy -- by 75 points following the Turkish lira’s sharp fall against the U.S. dollar.

"The Central Bank focuses on monetary policies while we focus on production, investment, and employment issues. The government and the bank are working in coordination on these issues," Yildirim said.

Yildirim met with economy editors from various TV channels, newspapers and news agencies at Cankaya Palace in Ankara to evaluate the country's situation on Tuesday.

Commenting on the increase in interest rates, Yildirim stressed that the situation was cyclical and resulted from temporary fluctuations and did not reflect the fundamentals of the Turkish economy.

He said: "Of course, we do not desire higher interest rates which may interrupt growth, investments, competition and increase costs. The government aims to keep the finance channels open with low costs.

"But the Central Bank is totally independent and has specific policy instruments to achieve its goals. We need to make sure that the government and the bank cooperate to reach the targets for inflation and growth.”

Yildirim also said the conflicts in Syria and Iraq, the July 2016 coup attempt and the ongoing struggle with terrorist groups had overshadowed the government's efforts to stimulate the economy in the last six months.

"We have taken at least 200 serious actions to solve the problems in the past and are preparing new opportunities for the future. If we explain them adequately, we will actually get very positive results. From now on, we will devote more time to explain these measures," he said.

The prime minister stated that there was a perception problem for Turkey.

"Look at the parameters of the Turkish economy -- whichever you want -- our economy is stronger than other similar countries. I am sure that things will [correct themselves] rapidly in the coming months, and everything will be better in Turkey," Yildirim said.

Commenting on the risks of non-performing loans, Yildirim said there was no need for panic in the banking sector and that lending channels were open.

"Banks should not recall the loans due to reassessments of credit assurance after the recent fluctuations in the foreign exchange rates, which are temporary. The state will provide support if need be," he added.

The Turkish lira lost more than 20 percent of its value against the dollar since November of last year.