Deputy PM: $3 bln enters into Turkey in 25 days

$3 billion has entered into Turkey in 25 days, Deputy Prime Minister Ali Babacan has said yesterday, speaking in the town of Davos where capitalism is questioned this year. "We won't allow economy to fall into recession," Babacan said in a televised interview on the sidelines of the World Economic Forum, adding that Turkey sees no need to change its growth forecasts. "The net foreign currency totaling $5 billon entered into Turkey as from early August to the end of the year, during which the Central Bank has sold great amounts of foreign currency. The most important reasons for an increase in inflation over the last three-four months derive from an increase in exchange rate, high energy prices, as well as new regulations regarding import and flood disaster. These are not so related to the Central Bank's monetary policy. These are one-shot things that cannot be fixed by the Central Bank. Thus, we are not concerned about one-shot inflation which is increased by temporary reasons. Other countries enviously admire the amount of our targeted budget. Turkey has neither budget deficit problem, nor public debt problem," Babacan said. Stanley Fischer, head of Israeli Central Bank, who was in Davos to attend World Economic Forum said, "Turkey's growth rates are impressive. Turkey is like an Asian country in terms of growth. However, it has some weak points such as current deficit and inflation. The interest rate policy of its Central Bank is so interesting. Some countries have made changes in interest rate corridors. However, turning it into a main policy instrument is an innovative move," pointing out that Turkey's economy showed a successful performance. Kemal Dervis, deputy chairman of the Brookings Institute has stated that he foresees a promising future for Turkey, adding that Turkey's growth of 4 percent is a positive development. "Turkey is on the way of more promising days. If Europe suffers a full collapse, Turkey will be affected by this. It is not possible to go ahead with such a high current deficit. It will be helpful to keep it around 5 percent. Unless extraordinary developments occur, Turkey might enjoy a soft landing," Dervis said.