Berat Albayrak: Interest rates will drop to single digits!

Minister of Treasury and Finance Berat Albayrak said, “With God’s permission, as we enter 2020, our public banks are introducing single-digit interest rates to our markets. Good luck.” said.

Albayrak, who came together with business people at the Chamber of Commerce within the scope of “Kayseri Business World Meeting”, said in his speech there that they have gone through a very difficult process in the last 1.5 years.

Minister Albayrak: Our public banks are introducing single-digit interest rates to our markets

Emphasizing that they left behind this period in which they were exposed to the biggest economic attacks in history by showing a very strong resistance together, Albayrak said, “It was a period in which those who trusted in Turkey’s potential won and those who tried to scare our country and nation with disaster scenarios were disappointed. Let Turkey stumble and not be able to continue on its way.” “There are many people waiting with hope. They were upset; those who trusted in their producers, industrialists, investors and Kayseri won. From now on, with God’s permission, those who believe in their country, their nation, their country’s human resources and investors will continue to win.” he said.

Albayrak stated that at the end of 2019, current data, leading indicators, normalization in the economy continued strongly, and 2020 gave the clues that it was time for change, and said:

“Those who said just a year ago that Turkey would be stuck in the devil’s triangle of exchange rate, interest rate and inflation, and in this sense that Turkey would not be able to get out of this spiral, were greatly disappointed. With the improvement we achieved in inflation, which started from 24 percent exactly one year ago, 24-25 percent in CPI and 45 percent in PPI, we saw these in September and October. A year has passed, as of September, October and November, we have reached 9-10 percent and hopefully by the end of the year it will be below 12 percent. “We are entering a period in which we will close down the situation and, within this framework, make single-digit inflation permanent starting from next year and remove double-digit high inflation from the agenda of our citizens and administrators again.”

“We eliminated the interest rate pressure”

Stating that there has been a serious improvement in interest rates, similar to inflation, Albayrak explained that they have seen that the success of the fight against inflation comes with a serious reduction in interest rates, with the strong recovery in the markets and the improvement of expectations for the Turkish economy.

Minister Albayrak pointed out that the Central Bank made another 200 basis point reduction in policy interest rates with the decision taken at its last meeting yesterday and continued as follows:

“So we just look at the last 5 months, starting from July, and in the last 5 months, from August to August, a 1200 point discount has been achieved in 4 meetings. In other words, we have all seen a performance in which the interest rates will drop by half in a very short time. What has happened for 15 months, someone has been a disaster There were people who said, ‘If the interest rates go down, the exchange rate will soar, and if the interest rates go down, the dollar will reach 10’s. We started to get good and auspicious results every day from these steps we have taken and the programs we have implemented since August 2018. Once again, we started to scare our country’s currency. We witnessed a picture in which those who tried to create insecurity through it lost, and our tradesmen, SMEs and industrialists won. God willing, it will get better. After a period in which 40 percent was pronounced, with these steps, we gradually started to see interest rates at 11-12 percent. “We eliminated the interest rate pressure on the markets with both the realistic monetary policy of the Central Bank and the strong stance of our public banks on the side of the producers.”

Reminding that public banks exist for today and that there was a time when it was said “let’s privatize all public banks”, Albayrak said, “Our President opposed it. I am glad he did. In the last 3-5 years, the position of public banks as market makers, standing by the domestic economy and the real sector.” “If it hadn’t happened, maybe we would have gone through much more difficult times.” said.

“We will start to reflect it in our real sector as soon as possible”

Albayrak heralded that he wanted to share another good news in Kayseri today, after the Central Bank’s interest rate reduction decision that paved the way for the markets yesterday, and said:

“After the known October decision, in Malatya, in good communication with our public banks, we shared the decision that we reduced the interest rates to 11 to 13.5 percent. We talked to our banks on the way. They told me that interest rates are decreasing, costs are decreasing. We say that public banks If Turkey acts with public awareness, then these improvements should be reflected in the market immediately. There is no delay even for a day. As a matter of fact, we talked on the road today and hopefully our public banks are making their accounts and books. Because it is not like the old Turkey. As you know, the duty losses of public banks in the 2001 period were 30 billion. , 40 billion, now our public banks are making a profit, not making public losses, and will reflect their improvement to the real sector. When we look at this, we said what we will do, hopefully we will reduce this 11-13.5 rate to the range of 9 percent to 11.5 percent as soon as possible. We will start to reflect it on our real sector. Our President said, ‘Hopefully, we will see single-digit interest rates next year.’ “He said. With God’s permission, our public banks are introducing single-digit interest rates in our markets before the start of 2020. Good luck.”

“Türkiye is taking firm steps forward”

Referring to the fact that Turkey is going through difficult processes, Albayrak said, “Against all this pressure that has been put on our economy for 6 years, Turkey is taking firm steps towards the period of economic gains before these processes.” he said.

Evaluating the economic recovery, Albayrak said:

“As a matter of fact, when we look at employment, production, costs and confidence indices in September, October and November, leading indicators already reveal a serious improvement process. In this sense, we will mobilize all the necessary support and all opportunities. In sectors with a current account deficit of 46 billion dollars, domestic We announced the grant package that supports production. The fight against the current account deficit is one of the most important points of Turkey in this sense. Last year, in June and May, the current balance reached the current account surplus from a current account deficit of approximately 58-60 billion dollars. Why, because I have to find this much money every year. Then I will support domestic production. There are some people with an import-oriented economy approach who say, ‘Why should I bother with exports and production? Let me open the office, bring the goods from abroad over the phone, put the margin, it’s SSI, premium, factory, why should I bother with these, it’s better to import.’ “There is a change and transformation in Turkey. As of September, the number of registered exporter companies in Turkey exceeded the number of importers. This will increase with each passing year. We said IVME is one of the most important instruments that will support this. It will replace imports and create employment.” “It will increase and support this export-oriented industrial transformation. With this package, a limit of 40 billion lira has been allocated to more than 50 thousand enterprises as of the end of November for the last 5 months, and 25 billion lira of this has been used. This is a very important change.”

“Every improvement will be reflected without waiting”

Emphasizing that these steps will continue increasingly in 2020, Albayrak said, “In addition, we provided 20 billion lira of loans to more than 25 thousand companies within the scope of the economy value package. We announced the SME value 1 and 2 packages, and more than 45 billion lira of loans were provided. 240 thousand at Halkbank and TESKOMB.” “We have close to 25 billion tradesmen. We have provided nearly 25 billion financing to nearly 240 thousand tradesmen with very low costs of 6, 7, 8 percent in single digits.” shared his knowledge.

Minister Albayrak stated that they will continue to reflect every improvement experienced during the balancing process directly, without any delay, to the business world and citizens.

Referring to the “100 Thousand Social Housing Project” announced by President Recep Tayyip Erdoğan, Albayrak stated that within the scope of this project, low-income citizens can own a house with monthly installments starting from 894 lira and a maturity of 240 months, with the cheapest financial cost in Turkey’s history.

Albayrak said that 100 thousand social housing will be built every year, that they are in talks with the Ministry of Environment and Urbanization, and that they can increase the number according to capacity.

“We are moving to the change model”

“The most important goal of our struggle under the leadership of our President is to increase the welfare and opportunities of our country and our citizens,” Albayrak said and continued as follows:

“One of the developments that shows that we have left behind the most difficult part of our journey is the increase in confidence in the economy. The real sector confidence index increased by 9.2 points in November 2019 compared to the same month of the previous year, reaching 102. This increase was accompanied by 13.4 points in the service sector confidence index. It was 13.3 points in the retail trade confidence index and 8.6 points in the construction sector confidence index. Every increase in confidence in the economy contributes significantly to the revival of economic activities in all sectors and to Turkey’s re-entry into a growth path appropriate to its potential. 3rd quarter As you know, 0.95 was close to 1 percent, but when we look at the October and November data for the fourth quarter and the first 10-15 days of December, we see that the positive growth of around 5 percent is slowly coming, with God’s permission. We maintain the momentum we have gained and build on it even more. We will have achieved Turkey’s natural growth potential by 5 percent in the last quarter of this year. In the new story of the Turkish economy, we are moving to a change model that does not create a larger current account deficit as it grows, but reduces its dependence on imports and achieves its growth target by strengthening its exports. As you know, in June this year, we had a current account surplus on an annual basis for the first time during the 17-year AK Party government. As of July and August, we had the highest annual current account surplus in the history of the republic. “Turkish economy shrank four times in 2009, even though there was no economic attack against us.”

“Good news” signal to the furniture industry

Minister Albayrak emphasized that they believe in Turkey’s potential and that they will achieve this process by working shoulder to shoulder with the business world with the support they receive from the nation.

Stating that the furniture industry has demands from them, Albayrak said, “They conveyed these to us, we noted them down. Hopefully, we have a study on it, hopefully we will give good news in a very short time. Let me give the preliminary signal here.” said.

Kayseri Chamber of Commerce (KTO) Chairman Ömer Gülsoy also talked about the demands and problems of the business world.