Turkish economy on track for stability, Finance Minister Simsek says

Türkiye‘s Treasury and Finance Minister Mehmet Simsek forecasts 2026 as the start of a stability period, emphasizing that Türkiye is maintaining a steady disinflationary trend.

Regarding the decline in currency-protected deposits, Simsek stated, “Unless unforeseen events occur, an exit is imminent.”

Simsek highlighted the adverse effects of inflation, stressing that their primary goal in policy design is long-term price stability leading up to 2026. He made these comments during discussions on the 2025 budget for his ministry and affiliated institutions at the Turkish Parliament‘s Planning and Budget Commission on Friday.

Simsek remarked that rebuilding monetary policy takes time and assured that conditions are now permanently conducive to disinflation. The process, he said, is structured in three phases, with the first year serving as a transition period.

Gradual exit from currency-protected deposits

On questions regarding currency-protected deposits, Simsek recalled the mechanism was introduced in December 2021 as a temporary measure to stabilize exchange rates amid significant pressure on the Turkish lira.

The currency-protected deposits are directly linked to the monetary, foreign exchange, and reserve policies of the Central Bank of the Republic of Türkiye (CBRT), Simsek explained.

Simsek indicated that the process of phasing out the mechanism is ongoing, noting that the stock peaked in August 2023 but has since declined to ₺1.3 trillion ($37.7 billion) as of Nov. 8.

Following discussions, the 2025 budgets of the Ministry of Treasury and Finance and its affiliated institutions—including the Revenue Administration, Turkish Statistical Institute, Privatization Administration, Capital Markets Board, Banking Regulation and Supervision Agency, Public Procurement Authority, and Insurance and Private Pension Regulation and Supervision Agency—were approved.

Additionally, the Court of Accounts reports for the central bank, Investor Compensation Center, and Interbank Card Center were also accepted.