Dive into a low level – a record was made today by Turkish pound after the doubling – compared to the expected – reduction of interest rates by the central bank.
The pound fell 2,9% at the low level – record of 9,4782 per dollar after lowering interest rates at 16% by 18%, Reuters reports.
The central bank said there was still little room for easing its policy by the end of the year, leading to increase in inflation in the country and greater pressure in the pound, which already has the worst performance among emerging market currencies this year, according to the same source.
“The danger of one exponential devaluation in the near future it is so big now that it would be advisable not to have open positions in the pound at this point in time, “said a Commerzbank executive.
“The move is in line with the president’s views, Recep Tayyip Erdogan, but its monetary policy is simply wrong “We run the risk of entering an area where the real economy will be severely affected by the currency.”
Turkish central bank cut interest rates to 18% in September, despite the fact that inflation reached almost 20% in Turkey.
The reduction was seen as a continuation contrast of Erdogan at high interest rates, which has led him to replace three central bankers in the last two years.
Data from the Institute of International Finance show that foreign investors are making steadily their money from Turkey after the interest rate cut last month.
Turkish stocks fell 0.2% as data showed that consumer confidence in October reached its lowest level since February 2019.
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