UAE/TURKISH BUSINESS RELATIONS

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• Turkiye may keep rate at record low

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  Dr. Nilgün Birgören    Premium Member   Group moderator

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  Turkiye may keep rate at record low

  Turkish central bank Governor Erdem Basci may leave the benchmark interest rate at a historic low while raising reserve requirements for banks in a bid to rein in a widening current-account deficit.
  
  Basci will hold the one-week repo rate at 6.25 per cent, according to all 12 economists surveyed by Bloomberg.
  
  Basci may also opt to add to reserve requirements for the fifth time since December, according to economists including Cevdet Unal of Finansbank in Istanbul.
  
  The central bank is trying to slow economic growth, which swells the country's import bill and trade gap, without raising the benchmark rate and risking heavy inflows of short-term capital.
  
  Bank credit expanded at the fastest pace since September in the week ending May 16, even after a 10 percentage-point increase in the reserve requirement aimed at curbing lending.
  
  It's the current-account deficit that's screaming warning lights, even after "massive" increases in the reserve requirement in the past two months.
  
  • 25 May 2011, 11:12 am
  Dr. Nilgün Birgören wrote: > Turkish central bank Governor Erdem Basci may leave the benchmark > interest rate at a historic low while raising reserve requirements > for banks in a bid to rein in a widening current-account deficit. > > Basci will hold the one-week repo rate at 6.25 per cent, according to > all 12 economists surveyed by Bloomberg. > > Basci may also opt to add to reserve requirements for the fifth time > since December, according to economists including Cevdet Unal of > Finansbank in Istanbul. > > The central bank is trying to slow economic growth, which swells the > country's import bill and trade gap, without raising the benchmark > rate and risking heavy inflows of short-term capital. > > Bank credit expanded at the fastest pace since September in the week > ending May 16, even after a 10 percentage-point increase in the > reserve requirement aimed at curbing lending. > > It's the current-account deficit that's screaming warning lights, > even after "massive" increases in the reserve requirement in the past > two months.