ID :
158543
Mon, 01/31/2011 - 11:32
Auther :
Shortlink :
https://oananews.org//node/158543
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Turkish Finance Minister Simsek speaks to Wall Street Journal
NEW YORK (A.A) - Turkey's finance minister said that China was deliberately depressing its exchange rate, and that that was giving it an "unfair advantage" against countries like Turkey which competed in the same products for the same markets.
In an interview with the Wall Street Journal (WSJ) newspaper, Simsek, who is currently in Swiss city of Davos to attend the World Economic Summit, said, "it does not matter whether or not China and the USA are actively trying to keep their currencies low, the end result is pain for emerging markets.
"I think China is deliberately depressing its exchange rate, and that that is giving it an unfair advantage against countries like Turkey that compete in the same products for the same markets. Why else would a country accumulate almost 3 trillion USD of foreign reserves? It is quite obvious," he said.
The newspaper wrote that Simsek was less damning about the U.S. Federal Reserve's policy of quantitative easing, quoting him as saying that he did not think the U.S. was trying to manipulate its currency, but the consequences were also highly negative for Turkey, by helping to inflate the price of commodities such as oil that Turkey needs to import, and by stimulating inflows of hot money in search of higher returns than those on the dollar.
Simsek also declined to criticize the European Central Bank for running a historically loose policy, saying, "there are real issues with some countries in the periphery. It is understandable."
"Imports are now growing twice as fast as exports, a trend that analysts say threatens to unbalance the economy that had otherwise recovered quickly from the global financial crisis. The oil import bill alone this year is likely to be close to 5 percent of gross domestic product," Simsek said.
Simsek backed the unconventional policy that the Turkish central bank has adopted to reduce the capital inflows, cutting interest rates to reduce the incentive for carry trades and raising reserve requirements on banks, limiting the amount that they can lend.
"The policy is unconventional but it has our support. The last thing we want is another boom-and-bust. We want a break with the past," he said.
Simsek stressed that it would be wrong to draw any parallels between the Tunisian and Egyptian experiences on the one hand and Turkey's on the other. "Not only does the AK Party have far greater democratic legitimacy, having won a string of elections since 2002, but it has also made greater progress in eradicating poverty. Gross domestic product in per capita terms has tripled in the last nine years, and the country now devotes more a greater share of GDP to research and development than eight of the EU's 27 member states. No one in Turkey is now living on less than 2.30 USD a day, and that less than 10 percent is living on twice that much. Car sales, meanwhile, a traditional reflection of middle-class affluence, hit a record 150,000 in December," he said.
"We want a stable, prosperous, democratic neighborhood, and any progress to that end is not necessarily negative in the long run for Turkey," Simsek added.
The Wall Street Journal added that secular, Muslim and democratic, Turkey was arguably a role model and a natural place to look for assistance.
In an interview with the Wall Street Journal (WSJ) newspaper, Simsek, who is currently in Swiss city of Davos to attend the World Economic Summit, said, "it does not matter whether or not China and the USA are actively trying to keep their currencies low, the end result is pain for emerging markets.
"I think China is deliberately depressing its exchange rate, and that that is giving it an unfair advantage against countries like Turkey that compete in the same products for the same markets. Why else would a country accumulate almost 3 trillion USD of foreign reserves? It is quite obvious," he said.
The newspaper wrote that Simsek was less damning about the U.S. Federal Reserve's policy of quantitative easing, quoting him as saying that he did not think the U.S. was trying to manipulate its currency, but the consequences were also highly negative for Turkey, by helping to inflate the price of commodities such as oil that Turkey needs to import, and by stimulating inflows of hot money in search of higher returns than those on the dollar.
Simsek also declined to criticize the European Central Bank for running a historically loose policy, saying, "there are real issues with some countries in the periphery. It is understandable."
"Imports are now growing twice as fast as exports, a trend that analysts say threatens to unbalance the economy that had otherwise recovered quickly from the global financial crisis. The oil import bill alone this year is likely to be close to 5 percent of gross domestic product," Simsek said.
Simsek backed the unconventional policy that the Turkish central bank has adopted to reduce the capital inflows, cutting interest rates to reduce the incentive for carry trades and raising reserve requirements on banks, limiting the amount that they can lend.
"The policy is unconventional but it has our support. The last thing we want is another boom-and-bust. We want a break with the past," he said.
Simsek stressed that it would be wrong to draw any parallels between the Tunisian and Egyptian experiences on the one hand and Turkey's on the other. "Not only does the AK Party have far greater democratic legitimacy, having won a string of elections since 2002, but it has also made greater progress in eradicating poverty. Gross domestic product in per capita terms has tripled in the last nine years, and the country now devotes more a greater share of GDP to research and development than eight of the EU's 27 member states. No one in Turkey is now living on less than 2.30 USD a day, and that less than 10 percent is living on twice that much. Car sales, meanwhile, a traditional reflection of middle-class affluence, hit a record 150,000 in December," he said.
"We want a stable, prosperous, democratic neighborhood, and any progress to that end is not necessarily negative in the long run for Turkey," Simsek added.
The Wall Street Journal added that secular, Muslim and democratic, Turkey was arguably a role model and a natural place to look for assistance.
