February 14, 2018 / 7:42 AM / a year ago

Turkey to prioritize inflation, current account, Simsek says

ANKARA (Reuters) - Turkey will prioritize lowering inflation to single digits and keeping the current account deficit under control while advancing reforms to boost growth and make the economy resistant to shocks, Deputy Prime Minister Mehmet Simsek told Reuters.

Turkish Deputy Prime Minister Mehmet Simsek attends a joint news conference with European Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen (not pictured), at the European Commission headquarters in Brussels, Belgium, December 8, 2017. Reuters/Eric Vidal

In an interview late on Tuesday, Simsek said that economic growth in 2017 probably exceeded 7 percent and that the government was sticking for now to its medium-term program target of 5.5 percent growth in 2018.

“If you look at the data from the last quarter, there is a high possibility that the growth would exceed 7 percent in 2017,” Simsek said.

“We still stand by the medium term program. Our target is the medium term program until we change it,” he said adding that the three main elements that will boost growth will be domestic consumption, foreign demand and investments.

The Treasury, which he oversees, was seeking to diversify borrowing both geographically and in terms of instruments, Simsek said. It was looking at the Chinese panda market and may make an issue in the Russian market.

“The Eurobond market will be our main market but sukuk is a significant alternative,” Simsek said on foreign borrowing.

“We had discussions regarding the Panda market when we visited China. An issue on the Russian market might be on the agenda,” Simsek said adding that sukuk and gold-backed bond issues will be evaluated as well.

He also said the U.S. Justice Department and Treasury had not made any requests other than to Turkish state lender Halkbank (HALKB.IS) after a U.S. jury found one of its executives guilty in an Iran sanctions-busting trial.

“Until now, there hasn’t been any request or inquiry from the U.S. Justice Department or Treasury except for Halkbank. Thus, we do not foresee a risk (on the banking sector) in general,” Simsek said.

Halkbank is a public company which communicates with its investors, Simsek said adding that the lender is also in contact and cooperation with the U.S. Justice Department and Treasury.

Writing by Daren Butler and Ezgi Erkoyun; Editing by David Dolan and Dominic Evans

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