Economy

Erdogan says rate hike was bitter but necessary for Turkey

Erdogan says rate hike was bitter but necessary for Turkey”

The reshuffle and Erdogan's subsequent promise to give his new economic team a free rein to right the economy sparked a sharp rally on the Turkish market.

Turkey's central bank sharply raised its benchmark interest rate, pledging to combat inflation less than two weeks after President Recep Tayyip Erdogan reshuffled his economic team and backed a shift in approach to fix an economy beset by a dwindling currency.

The CBRT raised rates in September, but last month it held its key policy rate steady despite expectations for another policy tightening.

The lira has lost nearly a quarter of its value this year and has slid by more than half since the start of 2018 when a currency crisis swept through financial markets.

The ongoing currency collapse had heightened concerns about a payment crisis in the country because Turkish companies and the state are heavily indebted in foreign currencies.

Loss of income due to the slump in the important tourism business is now worsening the situation, which is also characterized by the fact that the central bank had used up its foreign exchange reserves in the vain defense of the Lira exchange rate.

More news: SpaceX Dragon capsule reaches International Space Station

"In the periods ahead, all factors affecting inflation will be taken into account, and the tightness of monetary policy will be decisively sustained until a permanent fall in inflation is achieved", the statement added.

The bank said the one-week repo auction rate would go to 15 percent from 10.25 percent and that it was eliminating all other lending facilities to make its policy decisions more "transparent".

"The lagged effects of depreciation in Turkish lira, increasing worldwide food prices and deterioration in inflation expectations affect the inflation outlook adversely", the central bank noted. It increased its late liquidity window rate to 14.75 percent to counter persistent double-digit inflation, which stood at 11.89 percent in October. Governor Agbal was installed by President Erdogan less than two weeks ago, but has already moved quickly to implement the new economic approach.

The policy meeting was being closely watched after President Recep Tayyip Erdogan last week promised reforms and a new era in the management of the economy to attract foreign investments. Agbal's appointment was followed by the resignation of Erdogan's son-in-law and finance minister Berat Albayrak, who was later replaced by Lutfi Elvan, a former deputy prime minister. He also wants to focus on growth, exports and employment.

"We should not let our investors be oppressed by high interest rates", he said on Wednesday.



Like this

loading...
loading...

Latest


21 November 2020
CDC Cancels Thanksgiving: Agency Advises Against Holiday Travel Amid COVID Surge
Based on its October models, it forecasts 50 million Americans will travel for the holiday, compared with 55 million in 2019. Many Americans get together with their family and friends on and around Thanksgiving Day, the fourth Thursday of November.

21 November 2020
Keanu Reeves Is As Johnny Silverhand In Cyberpunk 2077 Trailer
The trailer - which you can check out above - sets the stage for the world that players will find themselves surrounded by. On the contrary, this is the time where many improvements are being made which will then be distributed via a Day 0 patch.

21 November 2020
Kyle Rittenhouse Bought Gun With Stimulus Check
Rittenhouse, who is from IL , had connections to Kenosha through his 18 year-old-friend Dominick Black . Rittenhouse is too young to purchase a gun on his own so he had an adult make the purchase for him.

20 November 2020
Brexit trade talks suspended after European Union official tests positive for Covid
An EU diplomat also said the British proposal did not meet the bloc's demand for an independent body from the government. Prime Minister Boris Johnson was hospitalized in April and is now back in coronavirus quarantine until next Thursday.

20 November 2020
Liverpool boost: Van Djik begins new rehab phase
Fabinho did play as a makeshift centre-half after Van Dijk's injury though he too has missed games through injury. Liverpool confirmed a day later that the centre-back had to undergo surgery to fix a tendon in his left knee.

20 November 2020
Canada could see 60K daily COVID-19 cases by year-end, modelling predicts
That safer path requires that Canadians significantly reduce the number of people they come into contact with each day. "The curve shows that case counts have now far surpassed peak levels seen in the first wave".

20 November 2020
Whitmer urges bipartisan small business aid as COVID-19 cases surge
It's an act of kindness and love". 'I have not signed on to any notion of impeachment proceedings, ' Shirkey said Tuesday. Three Republican members of Michigan's House of Representatives introduced a bid to impeach Democratic Gov.

20 November 2020
Singer Tory Lanez Pleads Not Guilty In Megan Thee Stallion Shooting
SZA guests on "Freaky Girls", while 2 Chainz and Big Sean join Megan on "Go Crazy". Megan Thee Stallion's legal name is Megan Pete.

20 November 2020
Coronavirus immunity could last for years, according to new study
Delirium is a common symptom of coronavirus in elderly patients, found in around one in three infected over-65s. It comes as optimism grows over the development and deployment of effective vaccines to combat the pandemic.

20 November 2020
As pandemic surges, CDC recommends against Thanksgiving travel
Not traveling and staying home is the best way to keep yourself, and others, healthy this year. An updated version of the guidelines was posted to the CDC website on Thursday .