Turkish Lira ruble pulls out of the abyss, what will the Bank of Russia?
Increased volatility is observed today in the Turkish Lira. At 12:00 GMT the dollar/Lira jumped up by 4.5% to 6.54 after the words of Recep Tayyip Erdogan about the need to reduce the key rate. But the Central Bank of Turkey 14:00 GMT suddenly disobeyed the President and announced to raise interest rates from 17.75% to 24%, then the Lira has strengthened by 7% to 6.1. From an economic point of view, the tightening of monetary policy is justified, it will restrain inflation and support the Lira. But such a move is likely to displease the President.
Formally, the Central Bank of Turkey independent from the President, but earlier he was following the calls for Erdogan to raise. Inconsistency of financial and political authorities of Turkey is alarming investors, apparently, the economic crisis in this country is far from complete. Amid rising Lira, ruble also accelerated its consolidation the dollar/ruble fell back to the level of 68.3. Loud statements from the Central Bank of the Russian Federation at tomorrow’s meeting we don’t expect, but the intrigue is – raise the Bank rate by 0.25% or leave at the current level?