After the interest rate decision was announced, the dollar and euro rose to 9.4782 and 11.0064 lira respectively – more than ever before.
(Photo: Bloomberg)
Istanbul Many expected an easing, but not so much: The Turkish central bank cut the key interest rate by 200 basis points to 16 percent. The Bank’s Monetary Policy Council stated that there was “limited scope” for further rate cuts until the end of the year.
All 26 economists polled by Bloomberg had expected Governor Sahap Kavcioglu to continue easing monetary policy. While most had forecast a 100 basis point reduction, a minority saw an even weaker reduction.
Accordingly, many are surprised at the step that has now been taken. “Wow, TCMB, just wow,” commented Stockholm economist Erik Meyersson, where the acronym TCMB stands for the Turkish central bank. Analyst Timothy Ash commented that the Federal Reserve surprised everyone with this move. “(President) Erdogan and (central bank chief) Kavcioglu are saying ‘Fuck you’ to the opposition and the markets.” The Turkish economist Refat Gürkaynak simply writes: “Get well soon.”
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