Istanbul (Turkey News) During the 3rd Global Islamic Economy Summit held in Istanbul, Governor of the Central Bank of Türkiye Fatih Karahan said that the Turkish economy is in a stronger position to withstand severe global economic shocks due to its robust financial structure and improvement in the current account deficit.
According to media reports, he said during the conference that low inflation is fundamental for a stable and predictable investment environment, as it enables financial institutions to offer long-term and low-interest financial products more effectively.
The Governor said that the central bank’s priority is to promote productive investment so that the economy can become more stable and prosperous.
Highlighting the role of Islamic finance, he said that the system plays an important role in financial inclusion and provides an alternative channel within the banking system.
According to him, small and medium-sized enterprises significantly benefit from participatory Islamic financing, as many businesses cannot access credit through conventional banking but can benefit from this alternative system.
He noted that the share of participatory finance in Türkiye’s total banking assets was around 4.5 percent in the early 2010s, which has now increased to about 9 percent, reflecting steady growth in the sector.
Fatih Karahan further said that credit growth in participation banks has been stronger compared to conventional commercial banks, and the central bank is also working on special financial instruments and liquidity management tools to ensure harmony between the two systems.
He said that Türkiye’s economy has historically faced current account deficits during periods of rapid growth, making it vulnerable to external shocks.
According to him, global supply chain disruptions, the COVID-19 pandemic, the Russia-Ukraine war, and conflicts in the Middle East have increased challenges for central banks.
He added that in such circumstances, financial reserves, strong foreign exchange reserves, and reduction in current account deficit help stabilize the economy.
In conclusion, he said that recent data shows Türkiye’s economy is better equipped to handle global shocks and existing financial buffers are helping reduce the impact of crises.
