Turkish Central Bank

Right after the Turkish Central Bank lowered its interest rate by another 0.25, the same as last month, reporters asked Prime Minister Ahmet Davuto?lu what he thought.

The Turkish lira sank to yet another all-time low Feb. 9, a fresh historic low of 2.4950 against the dollar, hit by expectations the U.S. Federal Reserve could raise interest rates mid-year, bolstering the dollar and reducing appetite for riskier emerging-market assets.

Turkish Central Bank, under pressure from President Recep Tayyip Erdo?an to aggressively lower rates, on Feb. 3 rejected the option of an unscheduled rate cut as inflation slowed less than expected.
     
Erdo?an and his allies have over the last weeks lambasted Central Bank Governor Erdem Ba?ç? for failing to radically lower interest rates to stimulate faltering growth.

The Turkish lira weakened to as low as 2.42 against the dollar Jan. 29 on expectations that the Turkish Central Bank will cut interest rates at an extraordinary monetary policy committee meeting as early as next week.

The Turkish Central Bank should immediately cut interest rates, Economy Minister Nihat Zeybekci said on Jan. 13, citing the country's inflation target of 5 percent this year.

A vocal critic of the Central Bank's policies, Zeybekci told broadcaster A Haber in an interview that rates could be cut to as low as 6 percent. The bank's one-week repo rate currently stands at 8.25 percent.

Annual inflation in Turkey ticked up to 8.17 percent in 2014, slightly higher than 2013 and well over the Turkish Central Bank's medium-term target, the state statistics office said Jan. 5.
      
However the figure was lower than expected by analysts, with inflation falling 0.44 percent in December from November.
      

A gradual economic recovery may be expected after the fourth quarter of 2015, accompanied by a decrease in inflation, the Turkish Central Bank has said in a statement.

The Bank expects that, in this gradual recovery, private demand will "contribute to growth at moderate levels," a summary of the Bank's Dec. 24 Monetary Policy Committee meeting has revealed.

The Turkish Central Bank kept interest rates on hold Nov. 20 and said it would keep monetary policy tight until the inflation outlook improves significantly.

The Central Bank is battling to rein in inflation even as the economy slows and conflict rages in neighboring countries.

The Turkish Central Bank will not dare, one assumes, to opt for a new interest rate reduction because of the uncertainty in the global financial environment. For this reason, market experts do not expect any interest rate changes in the Monetary Policy Committee (PPK) meeting to be held tomorrow.

The Turkish Lira/U.S. dollar rate rose to 2.292 on Oct. 1, its highest level since Jan. 27, just before the Turkish Central Bank intervened to stop a slide in value of the lira on Jan. 29.