Turkish central bank announces their monetary policy decision - 13 September
- One-week repo rate 24.00% vs 21.00% expected
- Prior 17.75%
Here's the statement details:
- Further monetary tightening to be delivered if needed
- Tight monetary policy stance to be maintained decisively
- Will remain until inflation outlook displays significant improvement
- Committee has decided to implement strong monetary tightening to support price stability
Now that's the kind of hike that the Turkish lira needs. Markets were expecting somewhere between 300 to 500 bps but this is certainly enough to calm some nerves faced by the lira for the time being. The bigger question now will be can the central bank maintain its independence in light of Erdogan's comments earlier in the day?
Should they be able to offer more rate hikes to come when the lira needs, then that will be a big change to the lira landscape. However, if Erdogan continues to press forward with his comments that interest rates should be lower, and if the central bank is only afforded this one free pass. Then the lira's reprieve here will certainly be short-lived.
