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Turkish central bank governor, finance minister to attend JP Morgan investor meeting: report

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Turkish Central Bank Governor Hafize Gaye Erkan and Finance Minister Mehmet Şimşek will attend a meeting with investors being held by JP Morgan in İstanbul on Friday, sources close to the matter told Reuters.

The Turkish central bank and finance ministry declined to immediately comment. JP Morgan did not immediately reply to a request by Reuters for comment.

After May elections President Recep Tayyip Erdoğan signaled a U-turn towards more orthodox economic policies and appointed former Wall Street banker Erkan and respected veteran policymaker Şimşek as Turkey’s top economic team.

They face the challenge of tackling economic strains that have sent the lira to consecutive record lows, fuelled high inflation and eroded tens of billions of dollars of foreign exchange reserves in recent years.

Reuters cited one of the sources as saying that Şimşek would share details on the actions taken on the economy by the new administration since the elections with the investors. Aside from interest rate hikes, there have been other tightening measures and tax hikes.

Last week at her first news conference since taking over the post of governor in June, Erkan said she would soon be holding meetings with investors.

Under the previous governor, the central bank slashed its policy rate to 8.5 percent from 19 percent in 2021 in line with Erdoğan’s unorthodox belief that high rates fuel inflation. The cuts sparked a currency crisis and the lira weakened 44 percent in 2021, 30 percent in 2022 and another 30 percent so far this year.

Annual inflation hit a 24-year peak of 85.5 percent last October and although it eased back in subsequent months, it rose sharply again in July to nearly 48 percent, official data showed on Thursday.

The lira was slightly weaker at 26.9870 against the dollar after the data, just off a record low of 27.05.

Since Erkan took charge, the central bank has hiked its policy rate by 900 basis points to 17.5 percent, but the pace of tightening has remained below market expectations. Last week the central bank more than doubled its year-end inflation forecast to 58 percent, in line with market expectations.

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