• Email Us: [email protected]
  • Contact Us: +1 718 874 1545
  • Skip to main content
  • Skip to primary sidebar

Medical Market Report

  • Home
  • All Reports
  • About Us
  • Contact Us

Turkish central bank surprises with rate cut sought by Erdogan

September 23, 2021 by David Barret Leave a Comment

September 23, 2021

ISTANBUL (Reuters) – Turkey’s central bank unexpectedly cut its policy rate by 100 basis points to 18% on Thursday, delivering stimulus long sought by President Tayyip Erdogan despite high inflation, and sending the lira to near a record low.

The central bank was widely expected to hold interest rates steady at 19%, where they had been since March, given inflation reached 19.25% last month. Only two of 17 economists polled by Reuters had predicted a cut.

But Governor Sahap Kavcioglu – whom Erdogan installed at the bank in March – has sounded more dovish in recent weeks, paving the way for Turkey’s first monetary easing since May 2020 and ending a tightening cycle that began 12 months ago.

Kavcioglu had begun emphasising core inflation, which stood below 17% in August, and had said policy was tight enough to cool price rises in the fourth quarter.

The bank’s policy committee said a rate cut was “needed” because of the lower core price measures – which strip out food and some other goods – as well as shocks to supply in the wake of pandemic measures.

The recent rises in inflation “are due to transitory factors”, it said. “The tightness in monetary stance has started to have a higher than envisaged contradictory effect on commercial loans.”

The lira fell as much as 1.5% and stood at 8.76 against the dollar at 1123 GMT, near an all-time low of 8.88 set in June. Depreciation brings further inflation in Turkey due to imports priced in hard currencies.

“Obviously the currency has weakened and it will weaken further, but I don’t think you are going to see it blow up completely because there was some positioning for this,” said Peter Kisler, emerging markets portfolio manager at Trium Capital.

The central bank’s dovish pivot this month had prompted analysts to warn of a “policy mistake” if cuts come too soon, though most predicted they would come before year end. Investor jitters drove a more than 4% currency devaluation this month.

Foreign investors have dumped Turkish assets in recent years due in part to concerns over the political independence of the central bank, given Erdogan ousted its last three governors over a 20-month span due to policy disagreements.

A self-described “enemy” of interest rates, Erdogan said in June he spoke to Kavcioglu about the need for a rate cut in August. Last month, he said “we will start to see a fall in rates”.

(Reporting by Ali Kucukgocmen and Daren Butler; Additional reporting by Marc Jones in London; Editing by Jonathan Spicer and Catherine Evans)

Source Link Turkish central bank surprises with rate cut sought by Erdogan

David Barret
David Barret

Related posts:

  1. BMW Group’s Neue Klasse lineup to focus on circular economy to achieve reduction in CO2 emissions
  2. Japan considering easing some COVID-19 emergency restrictions – media
  3. Haiti official resigns over PM’s links to suspect in president’s slaying
  4. U.S. officials to hold semiconductor supply chain meeting

Filed Under: News

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • In 1977, A Hybrid Was Born In A Zoo. What It Taught Us Could Save One Of The Planet’s Most Endangered Species
  • How To Park A Dangerous Asteroid So It Doesn’t Bite You Later
  • New Study Finds Evidence For What Every Parent Knows About Bluey
  • New Breakthrough Takes Plastic Garbage And Turns It Into Tool For Carbon Capture
  • NASA To Hold Press Conference About New Perseverance Rover Discovery Tomorrow
  • Strange Halos Have Formed Around Barrels Of Chemicals Dumped Off LA’s Coast Over 50 Years Ago
  • As We Grow Older, Our Music Taste Appears To Narrow To Fewer Songs
  • Stinky Seaweed Blob On Florida Beaches Thwarts Baby Sea Turtles’ Dash To The Ocean
  • NASA Is Set To Lock Up Four Volunteers For 378-Day Mars Simulation Study
  • For The First Time, A Vital Oceanic Upwelling Of Nutrient-Rich Water Failed To Emerge In 2025
  • One Of The Largest Crocs Ever “Terrorized Dinosaurs” With Teeth The Size Of Bananas
  • US Congress Is Holding Another UFO Hearing Today – Watch Live
  • Yes, Flying Snakes Do Exist – Sort Of
  • Meet The Bumblebee Bat: The World’s Smallest Bat Is The Last Of Its Kind
  • Did A Giant Planet Sculpt Fomalhaut’s Stunning Ring Into Its Squashed Shape?
  • The Unfolding New Astronomical Revolution – Gravitational Waves Discovery Turns 10
  • “Truly A Reversal”: Scientists Find Protein That Causes Brain Aging, And Learn How To Stop It
  • Tiny 2.5-Micrometer Particles Of Air Pollutants Can Promote Certain Types Of Dementia
  • Ants Have Taken Over Most Of The World – Except For A Few Places
  • Naked Mole-Rats: Bizarre-Looking Mammals That Defy Our Understanding Of Cancer And Aging
  • Business
  • Health
  • News
  • Science
  • Technology
  • +1 718 874 1545
  • +91 78878 22626
  • [email protected]
Office Address
Prudour Pvt. Ltd. 420 Lexington Avenue Suite 300 New York City, NY 10170.

Powered by Prudour Network

Copyrights © 2025 · Medical Market Report. All Rights Reserved.

Go to mobile version