2024-01-13 18:26:00
The authorities in Ankara decided to abandon their controversial interest rate policy in favor of a sharp monetary tightening after a prolonged period in which Erdogan pressured the bank’s governors, who were replaced frequently, to lower the interest rate, despite rampant inflation and the collapse of the value of the pound, and with the thought that this would increase growth.
#Moody’s upgrades #rating outlook on #Turkey to positive. Responds to change in Erdogan administration’s economic policy, but notes confidence in #lira not yet fully restored & remains wary of backsliding. #USDTRY #Sims #Erkan pic.twitter.com/VtmOtpTeNB
— bne IntelliNews (@bneintellinews) January 13, 2024
Last month, the Central Bank of Turkey raised the interest rate by 2.5% to 42.5%. The change began in June, when Hafiza Gaya Arkan was appointed to the position of governor. It then raised interest rates from 8.5% to 15%, and it was the first rate hike since March 2021. The rating agency said that the policy change now improves the chances of lowering the country’s inflation rate from its current high levels to more moderate levels.
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“Although inflation is expected to remain high in the near term, there are signs that its dynamics are beginning to change as a sign that monetary policy is gaining credibility and effectiveness,” Moody’s rating agency added. The annual inflation rate in Turkey rose to 64.8% in December, following an upward trend that is expected to continue in the coming months, after a large increase in the minimum wage in Turkey.
#Erdogan #celebrates #Moodys #raise #Turkeys #credit #rating