In a speech delivered following a fast breaking iftar dinner in the northwestern province of Bursa late on Monday, Çağlayan spoke out strongly against the central bank’s monetary policy, noting that his earlier criticism resulted in backfire from the media, which argued he had harmed the bank’s independence.
“We are not criticizing the institutional character of the central bank but its policies. I wish they formulated the correct policies so we could compliment them,” he said.
“Today pressure from interest rates and foreign currencies has turned Turkey into an importing country. I am saying this as a minister of this government, as a minister responsible both for imports and exports. The reason is one US dollar was worth TL 1.5 in 2002 and it is still the same today, nearly at the end of 2010, and one euro was worth TL 2.2 at the beginning of this year and is today TL 1.92,” he continued.
Çağlayan went on to argue that the central bank’s independence does not give it the right to harm the country’s exports. “It is independent, but how far does this independence go? The central bank does not have the right or the luxury to be independent from the economy, employment, production and exports,” he noted.
Turkey’s trade deficit increased by 89.4 percent in the first seven months of this year over a year ago. Its total volume of exports in the January-July period was $64.4 billion, a 13.4 percent increase over the same period last year. However, its imports saw an even higher jump of 32.1 percent, reaching $99.3 billion.
