Turkey’s central bank not to change official interest rates - analyst
Baku, Azerbaijan, April 22
By Aygun Badalova - Trend:
Turkey's central bank to leave its official interest rates unchanged at 7.5 percent on April 22, William Jackson, the economist at British economic research and consulting company Capital Economics believes.
"But we wouldn't be surprised to see tweaks to the monetary policy framework in order to release more foreign currency liquidity and shore up the lira," economist said in a report obtained by Trend.
The Central Bank's Monetary Policy Committee is due to meet Apr. 22, to decide whether to raise or lower interest rates.
Turkish government officials have repeatedly criticized the Central Bank for maintaining high interest rates, arguing they could be limiting the country's economic growth.
The inflation rate in Turkey was 8.31 percent in 2014. To keep the exchange rate of Turkish lira at a stable level, Turkey's central bank carried out an intervention worth $2 billion throughout 2014, however the attempt was unsuccessful.
On Jan. 20, 2015, the country's central bank lowered its key interest rate (the weekly repo rate) by 0.5 percentage points to 7.75 percent.
The process of strengthening the lira (by 9.4 percent) in 2014 continued until September of that year. The exchange rate of the national currency started cheapening in the subsequent months.
The Turkish lira hit record lows against the US dollar on Mar. 6, 2015 reaching 2.6862.
Capital Economics' analysts expect the level of inflation in Turkey at 6.3 percent in 2015 and 7.3 percent in 2016.
According to the Central Bank of Turkey, the official exchange rate is 2.7040 TRY / USD as of April 16.
Aygun Badalova is Trend Agency's staff journalist, follow her on Twitter: @AygunBadalova