Source: blogs.barrons.com - Friday, January 30, 2015
The Turkish lira slumped to a low this week against rival currencies amid signs the Turkish central bank may convene an unscheduled meeting to cut interest rates. The government has been putting on the repssure to boost sluggish economic growth. To stop the currency carnage, however, policy makers may be putting the brakes on future interest rate hikes. “Recent movements in financial markets are not consistent with the degree of caution of the rate cut cycle envisaged by the Central Bank of the Republic of Turkey,” read a statement issued by the central bank shortly before local markets closed. The iShares MSCI Turkey ETF ( TUR ) fell almost 2% Last week, Turkey’s central bank cut its benchmark interest rate for the first time in six months, citing falling oil prices, a On Tuesday, Central Bank Governor Erdem Basci’s suggested that policy makers may convene an emergency meeting on Feb. 4 to cut interest rates, fueling a selloff by the lira. Now, analysts regard the Friday statement from the central bank as a sign that the governor wouldn’t convene an extraordinary meeting. Central banks across emerging have cut rates as economic growth has slackened. In Turkey, President Recep Tayyip Erdogan wants lower borrowing costs to fuel the economy ahead of parliamentary elections in June.
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The Turkish lira slumped to a low this week against rival currencies amid signs the Turkish central bank may convene an unscheduled meeting to cut interest rates. The government has been putting on the repssure to boost sluggish economic growth. To stop the currency carnage, however, policy makers may be putting the brakes on future interest rate hikes. “Recent movements in financial markets are not consistent with the degree of caution of the rate cut cycle envisaged by the Central Bank of the Republic of Turkey,” read a statement issued by the central bank shortly before local markets closed. The iShares MSCI Turkey ETF ( TUR ) fell almost 2% Last week, Turkey’s central bank cut its benchmark interest rate for the first time in six months, citing falling oil prices, a On Tuesday, Central Bank Governor Erdem Basci’s suggested that policy makers may convene an emergency meeting on Feb. 4 to cut interest rates, fueling a selloff by the lira. Now, analysts regard the Friday statement from the central bank as a sign that the governor wouldn’t convene an extraordinary meeting. Central banks across emerging have cut rates as economic growth has slackened. In Turkey, President Recep Tayyip Erdogan wants lower borrowing costs to fuel the economy ahead of parliamentary elections in June.
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