News World Turkey's lira surges after unexpected rate hike

Turkey’s lira surges after unexpected rate hike

Turkey‘s lira has charged higher against the dollar as investors cheered the central bank’s surprise move to raise its policy rate, while emerging market stocks dropped to two-month lows.

After hitting a series of record lows, the lira climbed 1% as the central bank said a fast recovery from the initial coronavirus pandemic shock sent inflation higher than expected, prompting it to hike interest rates by 200 basis points after nearly a year of aggressive rate cuts.

Economists on Thursday were expecting back-door tightening measures while rates stay on hold.

“Massive surprise, and positive. Suggests the (central bank) listened to the market and decided they had to move to avoid a disorderly devaluation and potential balance of payments crisis,” said Tim Ash at BlueBay Asset Management.

“They are not out of the woods yet, but they have given themselves a fighting chance.”

The lira has lost over 20% versus the dollar this year, making it one of the worst performing currencies due to worries about Turkey‘s depleted forex reserves and sharply negative real interest rates.

The lira was also supported by easing tensions over sanctions from the European Union after Ankara agreed to talks with Greece over maritime claims, although a date for discussions had not been decided yet.

Stocks in Istanbul climbed about 1%.

(Reuters)

 

Top Stories

Republic delivers first dose of Pfizer vaccines to T/C community

The Cyprus Republic on Monday morning sent the first dose of 1000 Pfizer vaccines to the breakaway Turkish Cypriot community through the divided island’s...

Epidemiological indicators still below covid-19 safety levels

The epidemiological indicators in Cyprus are still below safety levels but the number of falling coronavirus test results recorded in recent days is encouraging, according...

Police issue 130 fines over breach of covid-19 restrictive measures

Police fined 127 individuals and 3 premises all across Cyprus over the past 24 hours for violations of COVID-19 measures. They had carried out a...

Cyprus President gets second dose of vaccine against covid-19

As vaccination against the coronavirus continues in Cyprus, President Nicos Anastasiades on Monday got the second dose of his vaccine. The President who said the...

Negative impact of lockdown on mental health of children, adolescents

The impact on mental health of children and adolescents from the coronavirus and protracted lockdown is very negative since these age groups are not...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...