The Turkish pound continues with the brakes broken, as after the record it set on Wednesday, at 9.85 against the dollar, on Thursday proceeded to record another negative record, reaching 10!
The fall of the pound is driven mainly by investors’ concern that the adventurous monetary policy of the Central Bank and Sahab Kavtzioglu, dictated, of course, by Turkish President Recep Tayyip Erdogan, is not keeping pace with the rise. After that, the question reasonably arises if Turkey has surrendered to the fall of the pound or wants it and feeds it.
The pound fell to $ 9,965 per dollar, extending losses this year to more than 25%. The currency traded down 1.2% at 9,951 per dollar at 11:31 a.m. local time in Istanbul.
Turkey’s central bank began lowering interest rates in September despite rising inflation and global price pressures, pushing investors away from emerging market assets at greater risk. The bank cut interest rates to 16% from 19% in the last two months, even as inflation accelerated locally to 19.9%.
It is worth noting that the pound had reached trading at 1.15 per dollar shortly before the 2008 global financial crisis.
Deutsche Bank said it now expects the Central Bank of Turkey (TCMB) to cut interest rates faster than previously expected by 100 basis points at each meeting in November and December.
“Due to lower-than-expected core inflation in October, TCMB’s recent focus on current account adjustments, and the increase in required foreign exchange and gold reserve ratios announced this week, we expect the TCMB to reduce interest rates “Policy faster than originally expected,” Fatih Akcelik said in a note to customers late Wednesday.
“The policy rate we expect at the end of the year is now 14.0% (previously 15%).”
Deutsche Bank also said it expects metric inflation to remain above 20% in the first half of next year and at 16.0% at the end of 2022.
Petros Kranias
* “Turkish lira is weakening faster”, says the Japanese bank MUFG
* How Turkey burned $ 665 billion worth of fossil fuels
* Famous Turkish economist: Dictatorships do not go away on their own, only if there is an economic crisis
* The only economist who predicted the reduction of interest rates in Turkey predicts a new slump for the pound
* Erdogan interest rate cuts will turn into a boomerang at the ballot box
* Foreign investors flee since Erdogan’s Turkey cut interest rates
.
Source From: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
