profishingrods.com
profishingrods.com November 16, 2018


Turkey: An Interest Rate Hike Stops the Bleeding

14 September 2018, 07:14 | Joann Bryant

Erdogan appoints himself chairman of Turkey’s sovereign wealth fund

Erdogan appoints himself chairman of Turkey's sovereign wealth fund

The currency rose to touch 6.3673 per dollar, the highest since August 29.

He criticised the central bank, saying it had consistently miscalculated inflation targets and again portrayed the currency crisis as a foreign conspiracy.

The lira has lost 40 percent of its value against the United States dollar this year over concerns about Mr Erdogan's influence and a diplomatic spat between Ankara and Washington but firmed to 6.01 following the interest rate decision, from more than 6.4176 beforehand.

The bank´s intervention was the latest aggressive rate hike to calm economic turbulence in an emerging market after the Argentinian central bank´s recent hike from 45 to 60 percent on August 30. After Thursday's rate rise it was down nearly 39 percent against the dollar this year.

Turkish companies sit on a net foreign-exchange shortfall of $216 billion, and analysts say they are likely to view any bouts of lira strength as an opportunity to rebuild their dollar reserves, slowing any gains.

Earlier in the day, Erdogan sowed confusion throughout the business community by publishing a decree making the lira the only currency that can be used in contracts between Turkish entities.

The surprise move buoyed markets that had been mired in a slump for months, triggered by a diplomatic row with the USA and then amplified by central bank inaction.




All 11 economists in a Reuters poll forecast the bank would tighten, but with the rate hike predictions ranging between 225-725 basis points as the bank balances concerns over lira weakness with worries about an economic slowdown.

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.

"Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement". For now though, this should provide the lira a much needed relief in the short-term.

The embattled currency has fallen by 40% this year amid a lack of interest rate hikes to control inflation.

Key rates are now at their highest level since 2004, around a year after Erdogan first came to power. They increased the cost of cash to commercial lenders by around 150 basis points last month by forcing them to use a borrowing tool costlier than the one-week repo rate.

He's delivered on that pledge, ousting the old guard of policy makers who'd guided the economy since 2002 and giving himself the sole authority to make appointments at the central bank and other state organizations.

The US hit two Turkish ministers with sanctions over the detention of US pastor Andrew Brunson and President Donald Trump doubled steel and aluminium tariffs on Turkey.



Other News

Trending Now

'Incredibly Distasteful': 'Outnumbered' on Trump Casting Doubt on Hurricane Maria Death Toll
The Republican and Democratic gubernatorial candidates, in differing tones, also separated themselves from Trump's statement. The mayor of San Juan , Puerto Rico's capital, slammed Trump for the comments nearly immediately.

Putin: 2 Men Suspected by United Kingdom for Spy Poisoning Not Criminals
British prosecutors issued European arrest warrants last week for Petrov and Boshirov, charging them with conspiracy to murder. The case has strong echoes of the poisoning of ex-Russian agent Alexander Litvinenko in Britain in 2006.

Dead rat in soup costs restaurant $190m
A simmering pot of hot soup is placed at a dining table and various vegetables and raw meats are then placed in the pot to cook. He alleged that one staff member had offered 20,000 yuan ($2,900) for an abortion if she was concerned about the baby's health.

Theresa May Should Deliver Brexit Then Resign, Says Ex-Policy Chief
Barnier's comments also dragged the Euro upwards yesterday, given the degree to which a smoother Brexit would alleviate pressure on the Eurozone economy.

SpaceX Will Send World's First Private Space Passenger Around the Moon
If all goes well, this unnamed passenger will be the first person to visit the moon since NASA's Apollo mission in 1972. Musk has designs on sending spacecraft to Mars and establishing a colony. there.

FDA chief calls youth e-cigarettes an 'epidemic'
Wednesday, the federal agency announced what it called its largest coordinated enforcement effort in its history. In raw numbers, that is 3.6 million students using tobacco a year ago compared with 4.5 million in 2011.

Missy Elliott and her ‘funky white sister’ collaborate for ‘Ellen’ performance
On Thursday's episode of The Ellen DeGeneres Show , Elliott had the opportunity to meet her super fan from Rhode Island. Upon finishing, the two, along with host Ellen DeGeneres , warmly hugged it out.

How to pre-order the iPhone XS and iPhone XS Max
It has the same upgraded technology as the iPhone XS phones, and you can take Bokeh portrait shots with the help of software. But remember, Apple used LCD screens up until last year's iPhone X , so longtime fans shouldn't feel the need to rebel.

Paul Manafort faces additional charges ahead of hearing
The discovery of his witness contacts led to a superseding indictment in June and Manafort's jailing ahead of his trial. Interested in Russia Investigation? The charges do not relate to Russian interference in the 2016 presidential election.

How Wilmington, N.C., Is Preparing As Hurricane Florence Gets Stronger
East Coast this week, falling just short of the level seen by Floridians in 1992 when Hurricane Andrew devastated the state. If Florence weakens enough to arrive as a Category 3 storm, it would likely be near the upper limit of that classification.