Central Bank of Turkey MPC Special Meeting
The Central Bank of Turkey, or CBT, just released a press release saying that the Monetary Policy Committee, or MPC, will be holding a special meeting tomorrow Thursday (10.00-12.00) to “assess the recent worries regarding the public debt problems in some European countries and global growth outlook.”
They will announce their decision at 12.00: I am no Nostradamus, but they’ll probably narrow the interest band corridor significantly, by 3 percent or so.
BTW, if you are working at the CBT: Feel free to use my liberal translation of the press release, as an English version is not up yet.
BTWW, at -0.41 percent mom (6.31 percent yoy), inflation just came out to be much lower than expected. I might write more on that once my friends at Turkey Data Monitor put the data up.
8 Responses to “Central Bank of Turkey MPC Special Meeting”
Why not just allow the currency to depreciate? I mean, what's so special about 1.72 or 1.73? It's already fallen >20% against the dollar. If the plan is to help rebalance the economy and reduce the CAD, wouldn't a weaker currency help?
Actually lower lira does not help Turkey at all. CAD may narrow for a while, but there is no structural adjustment.
Dear Mr Deliveli,
what is the effect of narrowing the interest rate corridor? Why do they do it if they do it?
Besides, I ,,predicted" lira will fly away after the no-hike decisions.
Sorry I am on the way to London, so I will do quick replies:
@Rogocop: Nothing in theory, but it seems that for various reasons, this seems to be more or less the CBT's threshold tolerance level.
@L_G: The idea is that once you narrow the interest rate corridor, the volatility in the lira will decrease and Turkey will attract short-term flows and lira will appreciate. But I will let Rogocop explain why it might not work, as he is kind of skeptical on the whole idea, as I am "being called in" (to the plane to Istanbul):)
We seem to be fast heading toward a global recession again: http://www.nytimes.com/2011/08/05/business/market…. It would be nice if the incompetents at the ECB and the FED learned a thing or two from the CBRT.
I honestly don't think the CBT's measures will work, but at least, they are responding to the crisis rather than creating one:)
what if there wont be another global recession? we will end up having a very huge CAD bomb in our hands, dont you think?
That's the problem:):):)