'Turkish Central Bank taking necessary steps'

ISTANBUL

The head of a major business group in Turkey on Tuesday praised recent interest rate moves by the country's Central Bank to fight inflation.

It is a positive development that the Central Bank has taken the necessary steps in the fight against inflation, Simone Kaslowski, the head of the Turkish Industry and Business Association (TUSIAD), told a video conference.

At the conference on sustainable sectors, Kaslowski underlined that necessary steps should be planned for both the short and long term as just like the rest of the world, Turkey is likely to face employment and production problems in the post-pandemic era.

Stressing that during this process Turkey also has to fight inflation, he added: "Although we will struggle due to tightening of financial conditions in such a period, we will see the benefits of lowering inflation, adopting free market principles, and improving the investment climate in the medium term, primarily in higher growth and employment."

Stating that Turkey’s new economic administration boosting communication with markets and the real sector will be an effective policy tool, he said transparency and predictability are the most important factors that boost trust in the economy.

Kaslowski also said Turkey must design its competitive capacity starting with its strategic sectors.

"Undoubtedly, one of them is industry. The share of the added value provided by industry is low compared to competing countries, and high- and medium-high technology production is below expectations," he added.

In a move hailed by markets, Turkey's Central Bank last week raised its one-week repo rate -- also known as the bank's policy rate -- from 10.25% to 15%, tightening its monetary policy to ensure price stability.

The move also followed changes in the makeup of Turkey’s economic administration and pledges of reform.

*Writing by Yunus Girgin in Ankara