February 20, 2014 / 9:45 PM / in 4 years

Developed world needs fiscal reform to ease pressure on c.banks-Turkey

SYDNEY, Feb 21 (Reuters) - Developed nations among the Group of 20 need to put their fiscal house in order and lessen the need for central banks to support their economies with monetary policy, Turkey’s Deputy Prime Minister for Economic and Financial Affairs said on Friday.

Ali Babacan made the comments at a conference in Sydney ahead of a weekend meeting of G20 finance ministers and central bank governors.

Turkey’s central bank stunned investors by hiking rates by some 500 basis points at an emergency meeting on Jan. 28, initially sending the lira sharply higher from record lows and helping short-circuit a vicious cycle of selling in emerging markets.

The central bank told economists this week it expects average funding costs to hover at around 10 percent for the foreseeable future, signalling it has no plans to hike interest rates further in the short term.

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