by Compiled from Wire Services
Mar 07, 2015 12:00 am
The Central Bank of the Republic of Turkey (CRBT) has further clarified its liquidity tightening steps, which are known as stealth rising of interest rates in markets. According to banking specialists, with its repo auctions on Friday, the CRBT has provided liquidity to the market, even though it is TL 5 billion to TL 6 billion ($1.903-$2.284 billion) less than what is needed. This means an additional tightening of TL 2 billion to TL 3 billion is needed, as far as previous days are concerned, and that overnight interest rates have risen by 30 basis points. An executive of a bank said: "Today, the CRBT's repo funding has been actualized as TL 5.5 billion less than what markets need. Normally, this figure was around TL 2 billion. We can say that today's tightening is TL 2 billion to TL 3 billion more. Overnight interest rates have risen to 10.6 percent from 10.3 percent." He also said that as long as primary dealers use the rights granted to them and unless they postpone their requirements, their funding amounts will easy exceed TL 4 billion.
PM soothes concerns over central bank Prime Minister Ahmet Davutoğlu on Thursday reaffirmed his government's commitment to the independence of the country's central bank in an address to the New York-based Council on Foreign Relations. Davutoğlu tackled concerns about Turkey's economy and foreign policy at the international think tank on the second day of his New York visit - a trip in which promoting U.S. investment in Turkey is a priority.
Davutoğlu's remarks come at a time when the bank faces repeated criticism from President Recep Tayyip Erdoğan and other government officials for its tight money policy, which some argue limits growth. "Here, what we need to understand is that, yes, the central bank is independent and it is taking its own decision ... but at the end of the day the performance of the central bank and the performance of monetary policy is part of the general economic performance," Davutoğlu said. He said many central banks in Europe also face criticism, and managing rates in a way that keeps the economy strong is a big challenge for each of them. "We want to have more growth, and for more growth we want to have less inflation and lower interest rates. That is the challenge we need to achieve," he said.
The economy has enjoyed a strong growth rate of more than 5 percent since 2002 fueled by trade and foreign investment. The growth has been faster than much of the industrialized world as well. The World Bank forecasted that Turkey grew 3.1 percent in 2014, a figure considered relatively weak by Turkish standards. "We are not satisfied with this 3 percent [figure]. We want to make it at least 4 percent this year and 5 percent and 6 percent in subsequent years," Davutoğlu said.
Keep up to date with what’s happening in Turkey,
it’s region and the world.
You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.