2023-06-25 11:02:54
The Turkish central bank has implemented the first new measures to improve the functionality of market mechanisms. As the central bank announced early Sunday morning, the regulations for maintaining securities in Turkey have been simplified.
Accordingly, the quota for the securities that Turkish banks have to allocate to their foreign currency deposits has been reduced from ten to five percent. This would also strengthen macroeconomic stability. The statement from the central bank went on to say that the decision was part of the measures announced after the Monetary Policy Committee meeting this week.
Andreas Mihm, Vienna Published/Updated: , Recommendations: 2
Only on Thursday did the Turkish central bank, under the leadership of its new boss, Hafize Gaye Erkan, announce a change of course in monetary policy due to persistently high inflation and currency turbulence and stated that the key interest rate would be raised from 8.5 to 15.0 percent. Economists polled by Reuters had even expected a larger step up to 21.0 percent.
The central bank had lowered its key interest rate from 19 percent in 2021 to 8.5 percent so far, even though the inflation rate had reached a 24-year high of 85.5 percent last October. Western central banks such as the American Fed and the ECB, on the other hand, fight inflation with higher interest rates.
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