The Turkish lira collapses after the central bank's decision to stabilize interest rates

Wednesday – 12 Dhu al-Qadah 1439 – 25 July 2018 Facebook Facebook logo Said Abdel – Razek

The Turkish lira bounced back to record levels after the central bank's monetary policy committee on Tuesday decided to maintain its tracking rate at 17.75%, reversing market expectations for further gains after a record high Inflation reached its highest level in 14 years last June, reaching 15.4%. In May, the central bank adopted the key rate as the main interest rate after the consolidation of interest rates, with the aim of simplifying monetary policies to counter the sharp decline of the Turkish lira which has lost about 25% of its value since the beginning of the year. Central Bank of the decision to install interest rates yesterday, the Turkish lira fell from 4.76 lira against the dollar to 4.91 lbs, before recovering some of its losses and is trading at price of 4.87 lire against the dollar at a loss of 3 percent. Monetary Policies as Cost and Volatility Factors The price of food is the main driver of the recent rise in inflation. While price increases have shown a general trend across the sub-sectors.
He added that despite the slight impact of demand conditions on inflation, high levels of inflation and expectations continue to weigh on prices. As a result, the Committee felt that it might be necessary to maintain a strict monetary policy for an additional period. The statement added that the central bank will continue to use all available tools in pursuit of the goal of price stability. The focus on monetary policy will be maintained decisively until inflation expectations show a significant improvement. Inflation expectations, price behavior and the impact of recent monetary policy decisions and the contribution of fiscal policy to rebalancing and other factors affecting inflation will be followed by and, if necessary, further monetary tightening. Bloomberg quoted Aberdeen Standard Investments as saying that the lira could fall 25 percent to its lowest level at 6 lira to a dollar if financial agents surprised the markets with a different movement.
Bloomberg said that "Turkey has raised interest rates at the central meeting to restore its credibility and deal with the" market defeat. "" It's risky not to raise rates of interest. " Interest, "said Victor Zabo, fund manager at Aberdeen Standard in London, adding that an increase of at least 100 basis points required, otherwise inflation could reach 20%, 100% of the current rate of more than 15%, and the government can face a strike of buyers in the primary bond market.For many investors, Nora Neutbaum, economist at ABN AMRO, said that Tuesday's meeting "may be their last fragile hope: despite political pressures, Turkey will reduce inflation and curb the fall of the pound."
Consumer price inflation more than tripled 39; official target and the deficit of the account c The country's market is among the most important emerging markets after months of recovery.
Meanwhile, the bakeries of the Istanbul Chamber of Commerce have increased the price of bread by 25 percent. Erdoğan Stin, head of the bakery in Istanbul, said the price of the baguette was 1.5 lira (1.25 lira).
Stein explains that this rise is explained by the price of flour at 90 lire after 70 lire. . We had to raise the price of bread.
Erdogan calls on investors to trust: At the same time, Turkish President Recep Tayyip Erdogan called on investors and the financial community to trust the future of Turkey, promising to provide all the facilities for their activity in the country. "The presidential regime has laid the foundation for a resolute approach to the country 's economic goals," Erdogan said at a meeting of the AKP (Justice and Development Party) parliamentary group Sunday after the presidential election. entry into force of the new regime after the elections on 24 June. "Erdogan sought to rebadure investors about the investment climate in the country, stating that" the presidency is one with which major investors will contact directly. "
He considers that investors in Turkey will be the biggest tomorrow and expresses his willingness to provide possible to enter the global investors and the financial community." Turkish President called international and local investors and all circles to be trusted in the future of Turkey
Turkish Minister of Finance and Finance Pratt Al-Bayraq yesterday held a consultative meeting with academics and economists. "The consultative meeting was successful and effective, "he said in a statement posted on his official Twitter account.Al-Bayraq added that the consultative meetings will continue, with the participation of personalities from all sectors, during which a roadmap will be developed for the economy.Already, al-Bayraq said that his country was on the brink of a dynamic phase during which a new economic system and financial would be put in place, highlighting reform policies, prudential policies and fiscal discipline. Under the presidential regime, a unique experience in terms of new development plan, economic life, price stability and the fight against inflation, reported Anatolia. Al-Bayraq pointed out that the global economy is currently undergoing a difficult test under increasing protectionism and that the trade balance is being rewritten, making the meeting historic and sensitive to a new phase of transition. parliamentary system to the presidency.

Economics