The Turkish economy's foundation is strong enough to resist any effects of a future decision by the U.S. Federal Reserve to hike interest rates, Turkish Finance Minister Mehmet Simsek has said at a finance summit in Istanbul.
Any possible monetary tightening and rate hikes by the Fed would not be as bad as what estimates suggest, said Simsek on Tuesday at the Istanbul Finance Summit.
Simsek said that forecasts over the damage Turkey might see following a possible interest rate hike in U.S. did not reflect the whole picture, as they missed deeper inspection of economic indicators.
Neither the state budget nor the banking sector lack foreign currency, while Turkish households have $190 billion in currency surplus, he said.
Meanwhile, a survey by his bank showed that more than 60 percent of Turkish firms did not owe debts in foreign currencies while a quarter were exporters and did, said Simsek.
The U.S. dollar has reached its highest point against the euro for 14 months, since the first hike in interest rates since 2008 crisis could result from a two-day monetary policy by Fed officials which ends on Wednesday.
Another possible outcome for the global monetary market would be that other major central banks took different action than the Fed, as they might ease their monetary policies due to deflation and a stagnating economy.
Highlighting such a move would ease the burden on developing companies, Simsek said: "Unlike past episodes of global monetary tightening, we do not expect globally synchronized tightening.
"You have a deflation risk in Europe, and possibly some sort of deflation risk in Japan."
"If Europe continues to ease, then the fallout from a Fed rate hike may not be as pronounced as it would have been otherwise," he added.
Simsek also pledged a new fiscal and economic reform package to rebuild Turkey's image which has been damaged since the Gezi Park incidents in 2013.
"We have to alter perceptions of Turkey, through making more reforms and embracing European standards," he said.
The new Turkish government is to present a five-year development plan and transformation programs under 25 topics, including 1,200 acts, in late October this year.
The Istanbul Finance Summit was first organized in 2010 to contribute to making Istanbul a regional financial hub.
It has hosted leading representatives of global financial markets and senior executives from financial institutions from North America, Europe, the Gulf region and East Asia.
The theme of the summit is “innovative finance.”
Other topics include investment banking, venture capital funds, angel investment, innovative tools and infrastructure financing methods and financial centers.
The Turkish government showed great interest in the two-day summit, in which Simsek participated.
It is sponsored by the Turkish Central Bank, Borsa Istanbul and the Secretariat of the Treasury.
The global communications partner for the second year is the Anadolu Agency.