Treasury and Finance Minister Mehmet Şimşek on Tuesday said foreign investors' worries about Türkiye's economic program have been resolved, as well as concerns regarding political support for the road map.
"This year, we've seen that all doubts are completely gone. Because our program is working, it's producing results and being implemented successfully. Therefore, the interest of investors is very intense," Şimşek told reporters in New York.
Şimşek has been in the U.S. to attend the spring meetings of the International Monetary Fund (IMF) and the World Bank. He held multiple high-level talks and discussions with investors during the trip.
He highlighted "highly productive" meetings with various international organizations such as the World Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development and the European Investment Bank.
Accompanied by Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan, Şimşek and his delegation held more than 20 meetings with large groups and met with hundreds of investors.
"We are strengthening the macroeconomic foundations with disinflation, structural reforms and fiscal discipline, which is attracting considerable attention," he told Anadolu Agency (AA).
"Therefore, investor interest was excellent, to put it simply."
The interest during the Türkiye Investment Conference on Monday was to the extent that the meeting room had to be enlarged, according to Murat Özyeğin, the head of the Türkiye-U.S. Business Council (TAIK).
The TAIK organized the event in cooperation with Citi in New York.
"The managers of the largest funds in the U.S. were present. There were likely funds exceeding hundreds of billions of dollars, possibly over $1 trillion. This is because all major fund managers attended our meeting," Özyeğin said.
Şimşek made presentations regarding the implementation, achievements and outlook of the government's medium-term program, unveiled last September after Türkiye walked away from years of easing policy after last year's presidential and parliamentary elections.
Şimşek leads the economy administration, which has delivered aggressive tightening aimed at cooling demand to curb inflation, rebuilding reserves, and flipping chronic current account deficits to surpluses.
"It is clear that confidence in the (medium-term) program has strengthened. Our message is clear; we will strengthen fiscal policy, support disinflation and review expenditures," Şimşek said.
"Once the review is completed, we will decide which expenditures to cut, which ones to freeze, and where to make reductions."
Şimşek pointed out the increased access of Turkish banks and the real sector to the global financial system, stressing the increased access to lower interest rates and more resources for a longer term compared to last year.
Such developments also indicate an increased confidence in the program, he said.
Şimşek recalled expectations that a permanent decrease in inflation would begin in the coming months.
"We will rapidly observe its decline starting from June. This is a process parallel to our program. Therefore, while reducing inflation, we are establishing fiscal discipline, decreasing the current account deficit, and strengthening Türkiye's structure with structural reforms," he noted.
Türkiye's annualized inflation climbed to 68.5% in March. Last week, the CBRT's Karahan said it is on track to reach the 36% target by the end of the year. Yet, he said markets believed the target would be achieved with a three-month delay.
The central bank has raised its key one-week repo rate by 4,150 basis points from 8.5% to 50% since last June, mainly seeking to ease demand, the main driver of inflation.
After last month's 500 basis point hike that stunned the markets, the bank cited a deteriorating outlook and pledged to tighten even further if it expects the price situation to worsen significantly.
The bank is widely expected to hold its benchmark policy rate unchanged at Thursday's Monetary Policy Committee (MPC) meeting.
Şimşek said fiscal policy would further support the economic program and disinflation.
"Our central is already doing a very good job in monetary policy. The current account deficit is narrowing faster than we anticipated. This will allow us to accumulate reserves," he noted.
Official data last week showed Türkiye's current account deficit stood at around $3.26 billion in February, less than a market forecast for a deficit of $3.7 billion.
The annualized shortfall has dropped to around $32 billion, compared to around $60 billion last May.
Şimşek stated that the economy's rebalancing continues strongly and emphasized expectations for a slowdown in domestic demand.
"The contribution of net exports likely turned positive in the first quarter. Of course, there will be some softening in domestic demand in the coming period. This rebalancing will permanently decrease the current account deficit and inflation," he said.
"We will all witness how inflation enters a permanently decreasing trend, not only due to base effects in the summer months but also with the steps we have taken in fiscal and monetary policy."
According to TAIK's Özyeğin, investors and businesses see a valuable opportunity ahead for Türkiye, which will be free of elections during the next four years.
"Türkiye has taken significant steps in terms of monetary policy. There is also a great opportunity to implement further reforms. At the end of this process, we believe that Türkiye will achieve a sustainable and predictable development model," he said.
"Within this framework, I can say that investors also share the view that Türkiye is ready for such reforms and that there is a favorable climate for this."
Citi Türkiye's general manager, Emre Karter, also highlighted that the investment conference went well. He emphasized the significant interest shown toward Türkiye as a result of the evaluations by credit rating agencies.
"We believe that in the coming days, the compounding effect of improving macroeconomic indicators and the downward trend in inflation will increase foreign investor interest," he said.
