UPDATE 1-Turkey prepping more support for workers, Albayrak says

(Adds Albayrak quotes, Hurriyet report, details)

ISTANBUL, June 5 (Reuters) - Turkey’s government is working on an employment support package in response to the coronavirus pandemic, Finance Minister Berat Albayrak was quoted as saying Friday, while media separately reported Ankara could extend a ban on layoffs.

The three-month ban on layoffs was imposed in April to offset shuttered businesses and unemployment as the government moved to curb the spread of the virus.

Citing unnamed officials, Hurriyet newspaper said President Tayyip Erdogan may extend the ban for three more months.

Albayrak met with reporters and was asked whether the layoff ban and a wage support system would be extended. According to broadcaster CNN Turk, he said: “We are making efforts to prepare a package that I can call an employment shield.”

Turkey has begun to ease a partial lockdown imposed in March. Economic activity has dropped sharply and unemployment is expected to have shot up in the second quarter. Inflation remains high above 11%.

Hurriyet reported the government is looking at ways to give incentives to companies that maintain employment or hire new people. It said the current wage top-up system could be replaced by alternative supports.

At the meeting of mostly local reporters, Albayrak was quoted as saying Turkey’s main priority is not the budget balance “in an environment where economic contractions around the world are being discussed.”

Other media quoted him saying the budget will recover in line with the economy; inflation would fall beginning next month; and that there would soon be a reversal in the so-called dollarisation trend, which was near a record high last week.

Separately, Turkey’s central bank has been in talks with other countries to establish or expand swap lines, in an effort to boost its diminishing reserves. Albayrak said the bank is carrying out “very intense technical work” on the issue. (Reporting by Ali Kucukgocmen, Tuvan Gumrukcu, Ezgi Erkoyun and Daren Butler; Editing by Jonathan Spicer)