Asia Unhedged | Turkish central bank seesaws between politics and market reality
A logo of Turkey's Central Bank is pictured at the entrance of the bank's headquarters in Ankara. Photo: Reuters, Umit Bektas
A logo of Turkey's Central Bank is pictured at the entrance of the bank's headquarters in Ankara. Photo: Reuters, Umit Bektas
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Turkish central bank seesaws between politics and market reality

The central bank is keeping interest rates down ahead of an upcoming constitution referendum which will reflect public approval of the president.

March 11, 2017 12:36 AM (UTC+8)

Under pressure to keep interest rates down in advance of the mid-April Constitutional referendum to increase the powers of the Turkish presidency, Turkey’s central bank has seesawed between allowing the lira to fall and bolstering the currency by reducing liquidity available to markets. The lira rose 0.8% today, the biggest gain against the dollar among EM currencies. Bloomberg reports, “The central bank has moved to drive the weighted average cost of funding another leg higher over the past week after data released March 3 showed annual inflation accelerated to more than 10% in February.”

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