No Fed rate hike to take place this week
The U.S. Federal Reserve (Fed) will not raise interest rates this week, Zeybekci predicted Monday.
He said any rate rise would increase the demand for the U.S. dollar, causing a rise in value. Zeybekci, who is responsible for Turkey's foreign trade, said an increase in the value of the dollar would not be sustainable for the U.S. economy, its exports or production in the long term.
"So, I think the Fed will not raise interest rates this week, in this period," he said. "Even if it raises [them], it will be a very minimum level. The markets have already priced in the increase. I do not believe in the need for intervention in the decline of the lira against the dollar by increasing interest rates in Turkey. Eventually, the market will handle this."
On Monday, the currency fell to a historic low of 3.068 against the dollar as pressure on emerging market currencies from an expected interest rate hike by the Fed grew, while losing 31 percent value in a year.
He said any rate rise would increase the demand for the U.S. dollar, causing a rise in value. Zeybekci, who is responsible for Turkey's foreign trade, said an increase in the value of the dollar would not be sustainable for the U.S. economy, its exports or production in the long term.
"So, I think the Fed will not raise interest rates this week, in this period," he said. "Even if it raises [them], it will be a very minimum level. The markets have already priced in the increase. I do not believe in the need for intervention in the decline of the lira against the dollar by increasing interest rates in Turkey. Eventually, the market will handle this."
On Monday, the currency fell to a historic low of 3.068 against the dollar as pressure on emerging market currencies from an expected interest rate hike by the Fed grew, while losing 31 percent value in a year.