Turkey
Turkish Monetary Policymakers Flag Risk of Future Ease
July 21, 2011
Policymakers at the Central Bank of the Republic of Turkey had cut their key interest rate by 1175 basis points from November 2008 to November 2009. Last fall, a complicated form of tightening was initiated that permitted the one-week repo rate to drop by a further 75 basis points in two steps but also raised […] More
Turkish Interest Rates Left Unchanged as Expected
June 23, 2011
Turkey’s unorthodox monetary experiment continues. The strategy implemented in late 2010/early 2011 combines low interest rates with a wider corridor between borrowing and lending rates, and higher reserve ratios and is intended to prevent second-order inflation from elevated commodity prices while also dissuading short-term capital inflows and dampening upward pressure on the lira that undermines […] More
Turkish Monetary Policy Left Unchanged
May 25, 2011
Monetary authorities at the Central Bank of the Republic of Turkey decided as expected to continue their wait-and-see stance, observing the lagged impact of various policy changes late last year and in early 2011. In May 2010, the one-week repo rate was adopted as the key operative central bank policy interest rate. It has been […] More
Status Quo Maintained in Turkish Monetary Policy
April 21, 2011
The Central Bank of the Republic of Turkey is engaged in an experiment of low interest rates, higher reserve requirements and a wide gap between its overnight borrowing rate of 1.5% and lending rate of 9.0%. The main one-week repo rate was slashed by 1025 basis points between November 2008 and November 2009 and, more […] More
Turkish Reserve Requirements Tightened and Not Balanced with a Cut in Central Bank Rate
March 23, 2011
The Central Bank of the Republic of Turkey increased reserve requirements by between two and five percentage points. As of April 1, most will range from 9% to 15%. This move was not anticipated, as policymakers had adopted a wait-and-see stance in February after implementing changes in prior months that lowered key interest rates, widened […] More
Turkey’s Unorthodox Monetary Policy Paused
February 15, 2011
No additional policy changes have been undertaken by the Central Bank of the Republic of Turkey. Like many emerging economies, Turkey has experienced higher inflation. Whereas other central banks have raised interest rates, Turkey lowered them. The one-week repo rate was cut by 50 basis points in December and another 25 basis points to 6.25% […] More
Surprise Turkish Rate Cut Part of a Plan to Curb Lira Strength
January 20, 2011
The one-week repo rate of the Central Bank of the Republic of Turkey has been reduced another 25 basis points to 6.25%. Such was cut 50 basis points in the middle of last month, its first change since July 2009. Rates were slashed by 1025 basis points over the first seven months of 2009. Monetary […] More
Turkish Monetary Policy Mix Modified
December 16, 2010
The Central Bank of the Republic of Turkey is taking an unconventional approach to stem excessive hot money inflows that have put upward pressure on the Turkish lira and which, officials fear, could create financial instability if left unchecked. The main one-week repo rate has been cut for the first time since November 2009, dropping […] More
Higher Turkish Reserve Requirements
November 17, 2010
On November 12, the Central Bank of the Republic of Turkey increased reserve requirements on local-currency denominated assets to 6.0% from 5.5%. That action followed a 400 basis point cut of the overnight borrowing rate unveiled the day before and reviewed here. The increase of reserve requirements should remove close to $1.5 billion equivalent from […] More
Turkish One-Week Repo Rate Remains on Hold
November 11, 2010
Turkey’s 7.0% one-week repo rate was left at 7.0%, it level since a 25-basis point cut a year ago, and analysts expect another year to pass before it is raised. A statement released by the Central Bank of the Republic of Turkey reiterated its expectation that current levels will be maintained “for some time” and […] More
