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Minister Canikli: “We do not expect rating increases from int’l rating agencies”

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Turkey’s Deputy Prime Minister Mr. Nurettin CANIKLI, one of Turkey’s Deputy Prime Ministers answered questions about the agenda in a program he attended on CNN Turk. CANIKLI said that the desired growth figures cannot be achieved high interest rates applied by the banks.

CANIKLI pointed out that one of the biggest obstacles in front of production was “interest rates”. He said “This is also true for inflation. It is not only banks in question here, but it is also the fact that whoever is authorized should do their part and banks have an important role to play at this point as well. The problem originates from following: Banks are on a nonstop competition for deposits and thus raise interest rates. No one benefits from this. Will the amount of deposits and resources increase when we do this? They will not but they will only change places. So such a race is wrong. Therefore we certainly cannot allow a politics that will result in raising the interest rates to grab deposits.”

CANIKLI pointed out that the growth expectation of 5 percent is positively reflected in all macro indicators, “Turkey is now a country that enjoys strong demand from abroad and has received an amount of money about US$ 8 billion as direct investment and portfolio investment. Foreign investors continue to invest in this country in a very intense way, with no difficulties in their credibility, in an increasing manner each day. The interesting thing is this is despite the fact that Turkey is rated by referred agencies as below the “investment grade” level…

Canikli said that Turkey was not interested in the question if credit rating agencies would change these grades and did not consider this to be important. Deputy Prime Minister also said: “Rating agencies have lowered our notes in order to sabotage our economy, especially in a most troubled period when we had to face attacks from all sides. We think this was deliberate. Despite these, our CDSs (credit default swaps) have fallen to 180 now. Our CDSs (credit default swaps) have fallen below the levels before July 15 to levels in 2005. “

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