Turkey stuns market with massive interest rate hike

13 Septembre, 2018, 19:52 | Auteur: Auguste Feret
  • EUR  USD daily chart on verge of extending leg higher

The depreciation has fueled higher import costs, contributing to an inflation rate that is more than three times the central bank's target, and many investors are calling for a large increase in borrowing costs to put an end to the rout.

Aberdeen Standard Investments Head of Emerging Market Debt, Brett Diment, said: "It is pleasing to see common sense prevail".

"Deterioration in the pricing behaviour continues to pose upside risks on the inflation outlook, despite weaker domestic demand conditions", the bank added.

It described the hike as a "strong monetary tightening to support price stability".

President Recep Tayyip Erdogan on Wednesday appointed himself the chairman of Turkey's sovereign wealth fund and named his son-in-law and Finance Minister Berat Albayrak as deputy chairman.

The lira firmed to 6.01 against the dollar following the decision, from more than 6.4176 beforehand.

The move comes as Turkey's currency has lost nearly a third of its value against the dollar since January.

The main share index rose 2.1 percent, with the banking index up 4.8 percent.

La capitale en état d'urgence en raison de l'épidémie de choléra — Zimbabwe
Elle s'est en outre déjà étendue à d'autres parties du pays. "Nous déclarons l'urgence à Harare ". Au moins 400 personnes ont été hospitalisées dans les quartiers de Mbare, Budiriro et Glen View.

Google tue discrètement Inbox — Mail
Il s'avère aujourd'hui que Inbox by Gmail n'est définitivement pas le remplaçant de Gmail, contrairement a ce qui pouvait être présagé à ses débuts.

Apple faces Trump's ire after company says tariffs would hurt products
Trump proposed what he referred to as "an effortless solution": "Make your merchandise within the united states instead of China". Chinese regulators have so far targeted farm goods and other exports from states that supported Trump in the 2016 election.

The central bank said it was returning to funding via one-week repos from Friday, having funded the market at an overnight lending rate of 19.25 percent for the last month.

Erdogan previous year said the fund needed a "reorganisation" after the first chairman Mehmet Bostan was removed from his post in September 2017. Erdoğan has always been pressuring the bank to keep interest rates low to encourage economic growth.

It was not immediately clear if Erdogan had been aware of the central bank's decision when he made his comments. "If you say "inflation is the cause, the rate is the result", you do not know this business, friend", he added.

"It was a big surprise to us, but probably to every Turkey-watcher", said Nora Neuteboom, an economist at ABN Amro, saying the move was a "positive signal" with the bank wanting to show its independence and commitment to fight inflation.

He said Turkey also needed to resolve a dispute with the United States, which helped drive the lira to a record low of 7.24 against the dollar a month ago, and rebalance the economy away from big infrastructure projects and consumer spending.

There had been indications from the bank that it would raise rates after inflation came in at almost 18 per cent in August, according to official data last week. Subsequently, the lira lost some 25 percent of its value while Turkish authorities have taken a series of steps created to support the currency, with the central bank taking liquidity measures and the banking watchdog limiting derivative transactions.

Earlier in the day, Erdogan published an executive decree that forces contracts between two entities in Turkey to be made in liras rather than foreign currencies.

Erdogan, a self-styled "an enemy of interest rates", has cast the lira crisis as an "economic war" targeting Turkey and has repeatedly urged Turks to sell their dollar savings to shore up the lira.

Conseillé:



Populaire

McDonald’s workers set to strike over sexual harassment
The company also told the AP that it has begun to work with outside experts to "evolve" those policies and procedures. Thus far, the almost year-old #MeToo movement has not triggered a strike targeting a specific United States company.

BMW : une moto autonome sur le circuit de Miramas
La moto peut effectuer toutes ses actions après avoir analysé la piste grâce à ses multiples capteurs. Des limites techniques existent encore et la moto n'est pas totalement indépendante.

Pro- and anti-whaling nations set for clash in Brazil
Japan says that it uses both lethal and non-lethal methods, but that some information can only be gleaned after killing. Japan has hunted whales for centuries as a historically more cost effective different supply of protein.

Former Arsenal target Dybala said to be set for January move
Pushed out of the starting XI since Cristiano Ronaldo arrived at Juventus , a move overseas seems inevitable. I told him, "go there, where football is played but don't stay in Italy",' Zamparini told RMC Sport .

On connait la date de lancement du Nintendo Switch Online en France
Notez que d'autres informations sur le online sur Switch seront par ailleurs distillées lors du Nintendo Direct de ce vendredi. Donc, Nintendo a décidé de reporter son Nintendo Direct a une date ultérieure.

Toby Alderweireld reveals the truth behind Manchester United's summer pursuit
The Belgian global has iterated that he never wanted to leave Tottenham, and that the rumours suggesting the same were untrue. Opinion from Spurs fans is split, with some happy at his comments and others reserving judgement until he signs a new deal.

Prince William Launches Website Focusing On Mental Health At Work
Mental Health at Work is one of the initiatives being driven by William as part of his ongoing work with Heads Together .

Pope Francis summons bishops to discuss sexual abuse scandal
Other clergy sex abuse scandals have occurred in countries including Germany, Argentina, Australia, Ireland and Chile. All bishops are required to submit their resignation at the age of 75, but the Pope does not have to accept it.

Macron annonce la création d'un "revenu universel d'activité" [direct vidéo — Plan pauvreté
Cette mesure vise à simplifier le recours à ces dispositifs, afin que davantage de bénéficiaires se fassent connaître. L'Etat limitera en outre à 10% le reste à charge des communes défavorisées pour la construction de crèches .

EU President says Brexit threatens North, not EU
Instead, Juncker said merely that this force would be strengthened with an additional 10,000 border guards. "This is why we want to find a creative solution that prevents a hard border in Northern Ireland".