Turkey’s central banker has left open the possibility of interest rate cuts in January, after another one this month, according to Reuters, citing participants in the banker’s investor call with investors.
Turkish President Recep Tayyip Erdogan last night appointed Nureddin Nebati as the new finance minister following the departure of Lutfi Elvan.
The new minister is considered a strong supporter of the policy of low interest rates, in contrast to the outgoing, which was about more orthodox policies.
The pound has stabilized at 13.42 against the dollar, after yesterday the intervention of the central bank to calm the movements in the market, after the collapse of the pound by 30% last month.
The selloff is due to a series of interest rate cuts to 15% from 19% in September, and strong support for the policy by Erdogan, even though inflation is close to 20%.
Due to the devaluation of the pound, inflation is estimated at 30% next year.
In a regular monthly call to investors, central bank governor Sahap Kavcioglu, who has been in office since March, told local investors there was little room for further cuts in interest rates this month, according to Reuters. four participants.
“I have the impression that it will stop relaxing and wait for some time in 2022, after a last limited reduction in December,” said one participant.
Also, according to another investor who participated in the call, Kavcioglu hinted that the bank “has now finished” the interest rate cuts.
In a statement following last month’s central bank meeting, which saw another cut in interest rates by 100 basis points, the bank said it would consider a limited cut at the next December 16 meeting.
According to the participants in the call, Kavcioglu added that monetary policy should stimulate investment and exports while limiting imports, and that the effects of the relaxation will be observed in the first half of 2022.
He is scheduled to conduct another call with foreign investors later today.
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Source From: Capital
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