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Silvermedia
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saxat från ft.com " Turkey’s central bank suggests rate rise to halt lira slideHigh quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/faed51d6-8741-11e3-ba87-00144feab7de.html#ixzz2rcuhHxcI
Turkey’s central bank signalled a possible interest rate increase on Monday after the lira hit another low, despite long-running government opposition to such a move.
The central bank said it would hold an extraordinary meeting on Tuesday after the currency neared TL2.39 to the dollar on Monday, an all-time low that represents a roughly 10 per cent fall from the start of the year.
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Amid expectations that an interest rate increase will result from the meeting, whose result is scheduled to be announced at midnight on Tuesday local time (10pm GMT), the currency immediately rebounded to about TL2.33.50.
Analysts said the move followed the failure of the bank’s previous attempts to stabilise the currency without increasing benchmark rates. These included plans last week to increase rates on “extraordinary days” – of which Monday is the first – from 7.75 per cent to 9 per cent, and an estimated $3bn intervention in the market.
Turkey’s Islamist-rooted government has repeatedly made clear its opposition to any increase in interest rates in what is a sensitive election year. Recep Tayyip Erdogan, Turkey’s prime minister, has repeatedly inveighed against what he dubs an “interest rate lobby” that is supposedly trying to hold back the country’s growth.
However, the country’s $60bn current account deficit – which is 80 per cent financed by short-term funds – and its limited net reserves, which are estimated at less than $38bn, and continuing political turbulence have all affected investor confidence.
Last week, in comments that Mr Erdogan labelled “treason”, Muharrem Yilmaz, head of Turkey’s biggest business confederation, said that no foreign investment would come to a country where the rule of law was in doubt. The independence of institutions such as the central bank has also come under the spotlight.
“It’s obvious that there is a clear preference in the political establishment in Turkey not to see rate hikes,” said Reinhard Cluse at UBS. “I am puzzled from a political perspective in which higher interest rates seems unacceptable, when the alternative is a weaker exchange rate, higher bond yields, and higher inflation.”" Källa: http://www.ft.com/cms/s/0/faed51d6-8741-11e3-ba87-00144feab7de.html#axzz2rcuDqc2G
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| Senast ändrad av Silvermedia; 2014-01-27 20:25 |
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Silvermedia
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Saxat från BBC News: " The Turkish central bank has called an emergency meeting of its monetary policy committee for Tuesday, following a sharp fall in the lira against the euro and US dollar.
The bank said it would "discuss recent developments and take the necessary policy measures for price stability" at the meeting.
It will set out its plans in a statement at 22:00 GMT on Tuesday.
The move comes amid market pressure for the bank to raise interest rates.
After the announcement, the lira firmed to 2.3420 against the dollar, compared with a record low of 2.39 earlier in the day. But it fell 0.5% against the euro to 3.17740.
Reluctance
Just last week, the central bank decided to hold rates steady at its rate-setting meeting.
Analysts say the central bank is reluctant to raise rates for fear of slowing economic growth ahead of local elections due in March.
The government has forecast that Turkish growth will pick up from an expected rate of 3.6% in 2013 to 4% for this year, sharply down from the 8% growth it achieved in both 2010 and 2011.
Turkish markets have been hit by an investigation into public sector corruption involving the construction industry.
The probe, which came to light in December, saw three ministers resign and prompted a cabinet reshuffle.
The bank last held an emergency meeting in 2011, when it decided to cut its main policy rate to 5.75% from 6.25%.
'Most vulnerable'
Economists at Capital Economics warned that market turbulence in emerging markets including Turkey had led to talk of a "new crisis".
It cited Turkey among a list of countries which it said would be the "most vulnerable" to the Federal Reserve's decision in December to slow down the rate of its asset purchases from $85bn to $75bn a month.
The US central bank has been running a stimulus programme, known as quantitative easing, aimed at boosting its economy following the global financial crisis.
As the US scales back the programme, investors could pull out of emerging markets, resulting in a further fall in stocks and currencies in those economies." Källa: http://www.bbc.co.uk/news/business-25913095
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| Senast ändrad av Silvermedia; 2014-01-27 19:58 |
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