Turkey sees temporary relief from Fed, no budget overshoot

Turkey will get only brief relief from the surprise postponement of a reduction in U.S. economic stimulus and must press ahead with plans to rebalance its own economy, Finance Minister Mehmet Simsek said on Thursday.
    
Turkey's gaping current account deficit, mostly driven by huge energy imports, and high foreign debt have made it one of the most exposed to the shift in global capital brought by any winding down of U.S. Federal Reserve bond-buying.
   
Its lira currency gained 3 percent in response to the Fed's surprise decision on Wednesday to put off the start of such moves.
  
"The Fed's tapering decision will provide temporary relief, but its current policy will not continue forever," Simsek told Reuters in an interview.
   
"Price volatility, interest rates, exchange rates or other variables, I don't see them as a fundamental crisis. I see this as repricing of assets," he said.
   
Simsek said government spending would not overshoot budget targets this year, forecasting the budget deficit this year would come in below its target of 2.2 percent of gross domestic product (GDP).
   
The primary surplus would meanwhile exceed its target of 1.2 percent of national output this year.


REUTERS