The pound is falling again against the dollar, as the rating agency Fitch downgraded the country’s outlook from negative to stable, due to the risks from the course of monetary policy.
The pound was at 13.75 against the US currency, about 0.6% lower than closing on Thursday.
It has lost 46% of its value against the US dollar since the beginning of the year.
The rating agency described the cycle of easing of policy by the country’s central bank, which began in September even when inflation was rising, early, and stressed that it caused a deterioration in confidence inside the country, reflected in a sharp devaluation of the currency .
“Maintaining a deeply negative real interest rate could further undermine domestic confidence, increasing the risks to financial stability, for example if depositors’ confidence is shaken, and possibly jeopardizing the hitherto resilient access of banks and foreign-funded companies, ”Fitch said in its assessment report.
Since September, the central bank has cut the key interest rate by 400 basis points to 15%, but the governor noted that the aggressive easing of the policy is likely to stop in January, after another reduction in December.
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Source From: Capital
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