OUR Bank of Turkey prolongs the current stagnation in terms of the level interest rates which remained stable for the third month in a row. His goal seems to be to keep the Turkish lira stable until the second round of the presidential election. Thus, interest rates in the neighboring country are at the level of 8.5%, while the Turkish lira reacted poorly to the news. The move could provide the central bank with some temporary credit, financial analysts say, as it somewhat offsets pressure on the country’s currency and somewhat protects the Turkish president’s popularity just days before the election. However, with the pound at historically low levels, the central bank doesn’t have many options, and keeping interest rates stable is one of them. And this is because the market expects that Turkish currency decline much more sharply after the second round of elections, regardless of who emerges victorious.

In a statement, the Bank of Turkey justifies its decision as “adequate to support the necessary recovery” after Turkey was hit by devastating earthquakes in February. However, it is no secret to anyone that she is acting on the orders of Tayyip Erdogan, who has called himself an “enemy of interest rates” and, referring even to the Koran, opposes rising borrowing costs and ruled out any rate increase in case of refusal. re-elected At the same time, the Monetary Policy Committee notes in its related statement that “recent data shows that in areas affected by earthquakes, economic activity is recovering faster than expected and, therefore, earthquakes will not have permanent effects on the overall economy. “. course of the Turkish economy.

According to Selva Bahar Bazica, Bloomberg Fellow Economist, “The central bank has left interest rates unchanged, but we estimate it will continue to apply unorthodox measures to banks to support the currency and intervene in foreign exchange markets to limit the impact of this extremely loose monetary policy. credit policy affects the country’s currency.