Turkey will prioritise the rebalancing of its economy and the fight with inflation, newly appointed Finance Minister Berat Albayrak said on Friday, adding that fiscal policy will support those goals.
In a statement issued after the first cabinet meeting on Friday, Albayrak said Turkey would produce a medium-term programme that would include input from stakeholders for the fight against inflation. He added that fiscal policy and the budget would be constructed based on this.
Turkey's lira has been hammered this year on concerns about the central bank's ability to rein in double-digit inflation. President Tayyip Erdogan, sworn in under the new executive presidency this week, has repeatedly called for lower interest rates.
"A clear plan for the aim of (fighting) against inflation will be put in place with consultation from all stakeholders in the economy and it will be announced in the medium-term programme," Albayrak said in the statement.
"It will sustain price stability in the medium term by bringing the inflation rate down to single digits in a short time period."
Erdogan's appointment of Albayrak, his son-in-law, to head the economy on Monday deepened concerns about the president's grip on economic policy and the independence of the central bank.
Investors are closely watching Albayrak's comments to see whether he will seek to calm financial markets by adopting a more orthodox approach to monetary policy, or whether he will reiterate Erdogan's views.
The president has unnerved investors with comments that high interest rates stoke inflation, a stance at odds with orthodox economics.
Albayrak added that budget spending would be more efficient and controlled more effectively and that shocks to inflation due to indirect tax adjustments would be brought to a minimum.
The lira has lost around a fifth of its value this year. Erdogan's latest comments about lower interest rates on Wednesday sent it to a record low, although it mounted a partial recovery on Thursday. The lira showed little reaction to Albayrak's comments and was at 4.8413 to the US dollar at 1445 GMT.
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