Turkish Central Bank

Turkish President Recep Tayyip Erdoğan is set to hold a meeting late on Jan. 16 with top economy officials, including ministers, senior civil servants and Central Bank Gov. Murat Çetinkaya, to discuss the recent volatility in the Turkish Lira and other economic developments, according to sources.

The Turkish Central Bank skipped its one-week repo auction on Jan. 16, aiming to boost the Turkish Lira by reducing the amount of local currency circulating in markets.        

The Turkish Lira plunged to record-low levels against both the U.S. dollar and the euro on Jan. 10, as the greenback continued to rise in global markets and various domestic political and economic concerns put the lira under pressure.

Turkey's current account deficit is expected to stand at $2.6 billion in November 2016, a group of economists said Jan. 9.

Turkey's inflation rate rose more than expected in December mainly due to hikes in prices of tobacco products and alcoholic beverages, a data from the Turkish Statistics Institute (TÜİK) showed on Jan. 3. 

The annual inflation rate rose to 8.53 percent in December from 7 percent in November. 

Deputy Prime Minister Mehmet Şimşek said last week that companies had a substantial foreign currency deficit and that they were working on curbing these. He said the current problem was managing the foreign currency gaps and that they were working on how to assist the private sector. 

Markets are eagerly eyeing the Turkish Central Bank's upcoming interest rate decision, slated to be announced on Dec. 20 amid continued pressure on the Turkish Lira with the end of high liquidity in global markets. 

The news about the European Parliament's vote asking the European Commission to suspend membership talks between the EU and Turkey came on Nov. 24, minutes after the Turkish Central Bank decided to raise interest rates by 0.25 percent.

Last week, when the U.S. dollar rose to a record high, the Turkish Central Bank's foreign currency and gold reserves eroded exactly $5.5 billion. They fell back to $117.5 billion, which is the highest drop since 2009 in the foreign exchange reserves, which are released on a weekly basis.

Market developments will be closely monitored by the Turkish Central Bank and necessary measures will continue to be taken to support financial stability, said Turkey's Economic Coordination Board late on Nov. 18, according to a source close to the meeting, state-run Anadolu Agency has reported.