Turkey cuts interest rate

By Hazel Davis

Central bank carves deeper than anticipated

                                

Turkey’s central bank has cut its benchmark interest rate by 2.5 percentage points, deeper than expected, with an improved inflation outlook.

US president Donald Trump announced the lifting of recently imposed sanctions on Ankara, which helped the lira briefly recover. It slumped again after the interest rate cut announcement.

The lira has survived three large interest rate cuts since June. Political turmoil led to the sacking of its central bank governor for refusing to cut rates. Turkey has also been involved in military activity in Syria.

This survival is in part due to global investors’ desire for higher-yielding assets.

BlueBay Asset Management strategist Timothy Ash called the surprising new reduction “perhaps a risky move”, in a note to clients. He added: “But this is a risk-taking central bank and administration. They are happy to take the market on.”

The Turkish government has posited a 5 per cent growth rate in 2020. Experts have speculated whether this ambitious figure will come from its foreign currency reserves.

FURTHER READING: UK announces new points-based immigration system

FURTHER READING: UK accountants at most gloomy in a decade

FURTHER READING: UBS CEO to join leading Swiss reinsurance firm

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
iPhone Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image