'Turkish government measures revived the markets'

By Fatma Eda Topcu, Abdulselam Durdak, and Murat Birinci

ISTANBUL

Turkish government measures have revived local markets, the head of the Istanbul Chamber of Industry (ISO) said on Tuesday.

Speaking at Anadolu Agency’s Finance Desk, Erdal Bahcivan said interest rates should be lowered to make Turkish industry more competitive.

"With the [current] interest rates, Turkey can’t attract new investments let alone maintain the current ones," he argued.

"Thus both inflation and interest rates should absolutely be brought to reasonable levels in line with financial stability."

Currently, the one-week repo rate -- also known as the Central Bank's policy rate -- stands at 24 percent.

Pointing to the economy’s vulnerability to foreign currency fluctuations, Bahcivan said Turkey saw positive developments in the recent stabilization of of exchange rates.

"From here on we should balance inflation rates. Turkey doesn’t have the luxury of seeing hyperinflation again," he said.

Turkey's annual inflation stood at 25.24 percent in October, according to the latest data from the Turkish Statistical Institute (TurkStat).

The figure rose 0.72 percentage points last month from 24.52 percent in September.

Bahcivan highlighted that Turkey’s current account deficit could be reduced through "pinpoint" methods.

"Turkey can overcome the current account gap issue through rational investments in technology, setting accurate targets, implementing the right financing policies, and choosing the right investors," he said.

According to the Turkish Central Bank, the country's current account balance showed a surplus in September for the second consecutive month this year.

Turkey's current account surplus totaled $1.83 billion in September, improving from a deficit of $4.4 billion a year earlier, the bank reported.