Turkish finance minister defends predecessor's forex reserves policy

FILE PHOTO: Turkish lira banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

ANKARA (Reuters) – Turkey’s finance minister has defended the foreign exchange reserve policy of his predecessor Berat Albayrak, saying transactions that had led to a sharp fall in reserves were a response to the extraordinary demands of the COVID-19 pandemic.

Albayrak, who is President Tayyip Erdogan’s son-in-law, abruptly resigned in November shortly after Erdogan replaced the central bank governor. In his two-year term as finance minister, the lira slumped to record lows while forex reserves dwindled.

In a social media campaign blaming Albayrak for economic woes, the main opposition Republican People’s Party (CHP) demanded to know what had happened to the $128 billion it says were sold from the central bank’s reserves.

“I strongly condemn the unjust and rude rhetoric used by the CHP over forex reserves against our former Treasury and Finance Minister Mr Berat Albayrak,” Finance Minister Lutfi Elvan said on Twitter late on Sunday.

“It is unacceptable to distort the foreign exchange reserves transactions carried out in line with the goal of financial stability amid the 2020 pandemic circumstances in an environment necessitated by extraordinary fluctuations in the global markets,” he added.

A lawyer for Albayrak said at the weekend the CHP’s campaign comprised “ugly slander and attempts at smearing” the former minister, adding that they would file a 500,000 lira ($71,000) damages lawsuit over the campaign.

“Transactions over the central bank’s reserves were carried out in accordance with the existing regulation and in line with the goals of financial and price stability, in a manner befitting the balance of payments requirements,” Albayrak’s lawyer said in a statement.

“Since the day he resigned from his post, Mr Berat Albayrak has been spending time with his wife and children at home, like in any normal Turkish family.”

($1 = 7.0130 liras)

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