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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Bankers: The Turkish Central will provide liquidity in lira at 19.25% when needed

    Rocky
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    • Post n°1

    Bankers: The Turkish Central will provide liquidity in lira at 19.25% when needed Empty Bankers: The Turkish Central will provide liquidity in lira at 19.25% when needed

    Post by Rocky Tue 14 Aug 2018, 2:32 am

     Bankers: The Turkish Central will provide liquidity in lira at 19.25% when needed


    Bankers: The Turkish Central will provide liquidity in lira at 19.25% when needed 9397


    The Turkish central bank will meet banks' needs of liquidity at lira at a higher cost than the benchmark interest rate, a four-source source said in a possible move to tighten monetary policy by using an interest rate corridor instead of raising interest rates.
    Bankers told Reuters after the central bank declined to issue its usual repurchase tender on Monday that the bank was ready to provide liquidity in lira to banks if they needed a one-night overnight rate of 19.25 percent, or 150 basis points above the weekly repurchase rate.
    They said the central bank had decided not to fund at this price because of price caps they described as unhealthy and excessive market volatility, and it is unlikely that the usual repurchase tender will take place in the coming days until such market movements subside.
    The central bank used a more complex monetary policy and adjusted interest rates through a corridor rather than using a benchmark interest rate.
    The bank has been under political pressure from President Recep Tayyip Erdogan, who has repeatedly called for cuts in interest rates to feed growth despite rising inflation, falling lira to record lows and fears of inflationary growth in the economy.
    The Bank subsequently moved to streamline its monetary policy instruments and announced in May that the process would be completed and that the one-week repurchase rate would become its benchmark interest rate.
    Bankers said it was too early to say the bank had returned to using an interest rate corridor.
    The lira has lost more than 40 percent against the dollar this year on fears of Erdogan's influence on the economy, his calls for lower interest rates and deteriorating ties with the United States.
    Last Friday, the steady decline turned into a crash: the lira fell as much as 18 percent and gained US and European equities as investors worried about banks' exposure to Turkey.
    Investors wanted an explicit increase in the benchmark interest rate to stop the currency losses, but bankers say a rebound in the interest rate corridor could be a substitute for higher interest rates.
    The central bank surprised markets last month when it kept interest rates unchanged despite double-digit inflation and the lira.

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