Dervis: Markets Will Absolutely Correct Excessively Valued Turkish Lira

ISTANBUL, Jan 30 (A.A) - State Minister Kemal Dervis said on Tuesday that markets would absolutely correct the excessively valued Turkish lira (TL).
Speaking at a cocktail party hosted by Turkish Exporters Assembly (TIM) to mark the start of publishing of its Turkishtime magazine, Dervis said that the currency had come to a specific balance without a Central Bank intervention and TL had started to increase.
Noting that it was a pleasing and necessary development that currency had not increased continuously and Turkish currency had not lost in value continuously, Dervis said, ''people have started to invest in Turkish lira again and this proved that Turkish lira can reach a balance within free market conditions and without a Central Bank intervention.''
Recalling that TL had never gained in value more like this except a few weeks in 1994, Dervis said, ''however, plans are destroyed in another way when it goes the side more. Serious problems occur especially about competitive power of exporters. We encountered the danger of losing again the competition share that we had lost in 2000 especially when one U.S. dollar decreased below 1 million 400 thousand TL. It has not totally lost yet but we have reached the point of losing it. There is really a problem here. We cannot say that this problem can be solved in one way or another but we should get used to free currency.''
''Foreign exchange which continuously gained in value until September triggered the inflation. We ended the year 2001 with high inflation. However, developments since October actually give us the trump card that the inflation will decrease and developments will have positive effects on the price in the domestic market. If this relative stability continues for a few period more, I hope that inflationist expectations will be destroyed. This is very important,'' he said.
Recalling that the civil society and private sector expected the inflations rate to be 50-60 percent although the inflation target in 2002 was 35 percent in the economic programme, Dervis said that this should be corrected in next two-three months.