Hawkish rise 10 days before local elections is seen as a signal of independence from politics

Hawkish rise 10 days before local elections is seen as a signal of independence from politics

Turkey’s central bank unexpectedly raised interest rates to 50% on Thursday, citing a deteriorating inflation outlook and pledging to tighten further if it looks like inflation is significantly and persistently worsening.

The hawkish move came 10 days before local elections and was seen by analysts as a signal that the central bank was independent from any political constraints and determined to tackle price rises.

The lira rallied by as much as 1.5% to 31.91 against the dollar in response to the hike from the previous 45% rate, reversing weeks of steady declines in the Turkish currency, and Turkey’s dollar bonds extended a rally.

  • blackfire@lemmy.worldEnglish
    15·
    8 months ago

    I don’t know what they can do to curb this. Its been screwed for well over a decade. What do they need to do to fix their economy?

      • Land_Strider@lemmy.worldEnglish
        23·
        8 months ago

        Stop being fucking idiots for the nth time in the last 20 years, get rid of the defacto dictator Erdoğan, gain some economic trust by not replacing him with even more stupid and outright religious lunatics that got a lot of courage lately, work legally and financially to retake the seaports, airports, defense industry corps, quarries, etc that were sold mostly to Qatari corps and billionaires, reinstate the border control to prevent the flood of Al-queda, ISIS, PKK-YPG, Hezbollah terrorist blending with illegal refugees (which number more than some European countries’ total populations already), work with Syrian dictator and ensure safe return of Syrian refugees and don’t let the matter fall into the hands of western or Russian politics this much.

        Basically some proper leftist line of thought and actions, which is unfortunately waning very quickly all over the world, for the next decade or two to get on track for development and prosperity.

    • Buffalox@lemmy.worldEnglish
      91·
      8 months ago

      Wow! 1960 1 USD would give you 11 Turkish Lira.
      Edit: Today 2005 1 USD will make you a millionaire in Turkish Lira.
      So apparently they are used to their currency devaluing fast.

      • LifeInMultipleChoice@lemmy.worldEnglish
        3·
        8 months ago

        I must be missing something (or it was a joke that went over my head, same thing really)

        If I look up the conversion it currently says the 1 USD is 32 Lira.

        Where are you getting the millionaire part?

  • AutoTL;DR@lemmings.worldBEnglish
    2·
    8 months ago

    This is the best summary I could come up with:

    The hawkish move came 10 days before local elections and was seen by analysts as a signal that the central bank was independent from any political constraints and determined to tackle price rises.

    The bank has now raised its key one-week repo rate by 41.5 percentage points from 8.5% since last June, after Recep Tayyip Erdoğan’s victory in May presidential elections and U-turn towards greater orthodoxy in economic policy.

    The “tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range”, the bank said.

    Piotr Matys, the senior FX analyst at InTouch Capital Markets in London, said the rate hike “stunned the market”, adding: “Today’s decision is a very strong signal that Governor [Fatih] Karahan, who took over from [Hafize Gaye] Erkan when she unexpectedly resigned, is determined to bring staggeringly high inflation under control.”

    Inflation rose to a higher than expected 67% in February when the central bank had held rates steady after a sustained string of hikes since June.

    Though inflation is expected to dip around mid-year, the recent lira slide coupled with declining foreign reserves had raised some expectations of more rate hikes ahead – though not until after municipal elections on 31 March in which Erdoğan’s AK party is hoping to win back key cities such as Istanbul.

    The original article contains 355 words, the summary contains 231 words. Saved 35%. I’m a bot and I’m open source!