turkish central bank takes urgent action to defend lira
Last Updated : GMT 12:34:34
Arab Today, arab today
Arab Today, arab today

6 FX auctions opened on Monday

Turkish central bank takes urgent action to defend lira

Arab Today, arab today

Arab Today, arab today Turkish central bank takes urgent action to defend lira

Turkey's Central Bank
London - Arabstoday

Turkey\'s Central Bank The Turkish central bank took urgent action to defend the lira and crimp lax credit on Monday, but the announcement of unconventional measures ran into market scepticism.
Market sources said that the bank had already begun selling dollars.
The bank sprang its announcement, including a signal that it will sell foreign currency, after the local lira fell to a record low value against the dollar.
There was scepticism on Turkish markets that spending reserves would prevent the lira from falling further.
The central bank announced that with immediate effect it was applying a \"strong\" tightening of monetary conditions.
\"It\'s essential that the extra monetary tightening is strong, effective and temporary,\" the bank\'s governor Erdem Basci said in a statement.
The new measures would be applied for as long as the lira was under pressure.
The lira was being traded at 1.9466 to the dollar, having firmed from a record weak level of 1.9740 earlier in the day.
\"In a world of higher yields (on bonds), the current ceiling of the interest rate corridor is unlikely to support the Turkish lira and spending reserves is unlikely to do the trick either,\" said Inan Demir, chief economist at Finansbank.
Demir said that defending the Turkish lira was \"not a must for the central bank\" and that allowing the lira to fall to help the competitive position of Turkish business would be a \"perfectly legitimate stance as well.\"
The central bank had opened six FX (foreign exchange) auctions so far on Monday, selling a total of $2 billion, Finansbank said.
The central bank said that it would continue gradually to shift the way in which the flow of lira was made available to the Turkish financial sector.
This would be done by switching liquidity from net foreign assets to net domestic assets until the bank\'s next monetary policy committee meeting later this month.
\"This strategy will not only soften extremely rapid credit growth but also support the value of the Turkish lira,\" a summary on the bank\'s website said.
\"This is not the first time that the central bank has done this as we have seen two recent episodes of additional tightening on June 11 and between June 19-21 more recently,\" Sengul Dagdeviren at ING Bank based in Turkey told AFP.
\"The move was not a surprise and shows that the central bank will continue to tame volatility within existing policy framework, ready to sell more FX (foreign exchange) via auctions too,\" she commented.
On the government debt market, Turkey\'s 10-year borrowing rate stood at 8.98 percent as the central bank announced its new tough action.
The yield had climbed to more than 9.0 percent on June 21, amid a wave of unprecedented protests against Prime Minister Recep Tayyip Erdogan and his Islamic-based government.
The borrowing rate was slightly above 6.0 percent in April.
The economy is ranked as the 17th biggest in the world, and the government hopes it will become the 10th-biggest within a decade.
But last month, the governing Justice and Development Party (AKP) was shaken by nationwide unrest, which Erdogan blamed various groups, including what he called an \"interest rate lobby\".
This referred to pressure in some quarters for a rise in interest rates to support the currency and retain foreign capital.
The central bank is independent of the government in setting monetary policy.
Andy Birch, senior economist at the US\' IHS Global Insight, said the central bank continues to suggest that it would be keeping interest rates steady, \"so as not to give into Erdogan\'s so-called foreign interest rate lobby.\"
But he predicted that with pressure steadily building to raise interest rates and the lira expected to remain unsteady, the bank \"will at least raise the overnight lending rate\" at its July 23 meeting, in order to relieve pressure on its monetary policy elsewhere.
Turkey, in common with many emerging economies is subject to signals from the US Federal Reserve bank that it will soon begin to wind down its special injections of money into the financial system to support the US economy.
This has caused some funds to be withdrawn from emerging economies.
\"The pressure on the Turkish lira is solely in parallel to the emerging market pressure in the rest of the world,\" said Dagdeviren.
\"We don\'t think local issues have been a significant decoupling factor so far for local markets,\" she added.
Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

turkish central bank takes urgent action to defend lira turkish central bank takes urgent action to defend lira

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

turkish central bank takes urgent action to defend lira turkish central bank takes urgent action to defend lira

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Prince's vision spurs new Cornwall village

GMT 03:12 2017 Saturday ,18 November

Prince's vision spurs new Cornwall village
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Israel ready to cooperate with Saudi

GMT 06:31 2017 Friday ,17 November

Israel ready to cooperate with Saudi
Arab Today, arab today Airbnb raided by Japan

GMT 01:55 2017 Saturday ,18 November

Airbnb raided by Japan
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla unveils its all-electric semi truck

GMT 02:59 2017 Saturday ,18 November

Tesla unveils its all-electric semi truck
Arab Today, arab today Baidu speeds up AI progress

GMT 11:46 2017 Friday ,17 November

Baidu speeds up AI progress
Arab Today, arab today Hanan Metawe denies apology for “Major Treason”

GMT 12:22 2017 Thursday ,16 November

Hanan Metawe denies apology for “Major Treason”
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 06:13 2017 Friday ,17 November

Pope denounces healthcare inequality

GMT 05:18 2017 Thursday ,16 November

Boeing announces $27bn from flydubai

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday