Deputy Prime Minister Şimşek assures no need to panic, all measures taken for markets
by Daily Sabah with Wires
ISTANBULJul 19, 2016 - 12:00 am GMT+3
by Daily Sabah with Wires
Jul 19, 2016 12:00 am
The deputy prime minister in charge of the economy, Mehmet Şimşek, assured there is no need to panic, saying that the economic administration has taken all measures to ensure normal functioning of markets. Şimşek yesterday talked to 500 foreign investors through a teleconference to give clear answers to all questions worrying them. He said: "There is no need to panic and we need to be calm. We got back to work very quickly. Would markets be open if there were a state of emergency?"
Stressing that they have taken all measures to ensure that markets can function uninterruptedly as if nothing happened, Şimşek said they will do what is necessary to enable markets run in normally. Asserting that the foundations of Turkey are robust, Şimşek said Turkey's stability has gained strength and the ground for social reconciliation has enlarged. "Our capacity to solve the problems has increased and we will not have permanent damages," he said. He also said markets will be open today, too.
All units on the job
Şimşek met with Central Bank of the Republic of Turkey (CRBT) Governor Murat Çetinkaya and Treasury Undersecretary Osman Çelik on Sunday morning and CRBT authorities met with banks. Explaining that the most critical issue in such situations is to provide liquidity for markets, Şimşek said: "If there is no liquidity in pricing, markets might go to unreasonable points even if with a very low volume. Therefore, we need to give a very strong message to markets relating to liquidity." Emphasizing that they always have plans for hard situations, Şimşek said all units are working. He also said Turkey has quickly returned to normal and presented self-confidence as the most important indicator of normalization. "I believe markets will run in a healthy way today. As the economy administration, we have taken all measures with CRBT and the Treasury to ensure the healthy functioning of markets and we are in dialogue with investors," he added.
Şimşek further said that institutions such as the CRBT, Treasury, Banking Regulation and Supervision Agency (BDDK) and Capital Markets Board (SPK) will act as a whole, adding they are also holding talks with foreign investors. He also said they are managing the process that will ensure the healthy functioning of markets, continuing that all players will act in unison to take the steps markets need.
According to Şimşek, markets will be open and there is nothing that requires keeping the Borsa Istanbul stock exchange closed. He said, in cooperation with all actors of the economy, they will explain that there is no need to panic as Turkey has robust foundations. Moreover, foreign investors will be assured that Turkey will continue to rise and advised that they must bear this in mind and act rationally while making investment decisions. "I believe these efforts will be effective," he said.
Time to look ahead
Şimşek said that the coup attempt was repelled thanks to the strong stance of public unity, adding that the government and institutions are all in charge and democracy is functioning. He referred to the emergency meeting where Parliament gave clear messages, continuing that the ruling Justice and Development Party (AK Party), opposition parties, nongovernmental organizations, business world as well as all political groups and segments of society are in unity to strengthen democracy. He said that it is time to look ahead to social reconciliation with the government and opposition: "The total resistance to the coup attempt paves the way for social reconciliation. Turkey survived a great crisis. Now, it is time to look ahead to see how we will consolidate our democracy and economy."
Teleconferences held with 500 foreign investors
Şimşek said that they held teleconferences with Merrill Lynch, Deutsche Bank and Renaissance Capital to give clear answers to questions from Asian, European and American investors and remove confusion in this period of uncertainty. "We aim to prevent the emergence of an atmosphere of panic in markets in which [investors] might make irrational decisions based on disinformation," he said.
No permanent damages
Asserting that Turkey has solid foundations, Şimşek said the economy continues to grow despite all the difficulties. According to Şimşek, leading economic indicators show that strong growth is continuing in the second quarter and Turkey continues to create jobs. The ratio of the current account deficit to national income has dropped to its lowest level at 3.7 percent. Inflation is likely to hover around the CRBT's target and is estimated not to exceed 7.5 percent in the second quarter. Also, the budget remains strong and macro framework is improving when the pre-coup picture is considered. He said the failure of the coup attempt indicates that Turkey will rapidly return to normal and the economy will not experience permanent damage, adding: "It is out of the question that this coup attempt will permanently damage the economy."