The removal of the Governor of the Central Bank of Turkey and the appointment of his deputy instead

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Central Bank keeps interest at 24%

Economy | 08:51 - 12/06/2019

 

 

 

BAGHDAD - 
The Central Bank of Turkey (CBK) on Wednesday kept the interest rate at 24 percent on repo for a week. 
"The recent data shows a continuing balance in the Turkish economy," the central bank said in a statement released after a meeting of the Monetary Policy Committee of the Central Bank of Turkey in Ankara. 
"External demand has maintained relative strength, along with a slowdown in economic activity due to the tightening of financial conditions," he said. 
The Turkish central bank expected continued improvement in the balance of the current account, stressing support for developments in domestic demand and the effects of monetary tightening on the decline in inflation rate in the country. 
The central bank decided to maintain the "tight financial position in order to accelerate the decline in inflation and reduce the risks related to the behavior of pricing."
"He will continue to use all the tools available to him to stabilize prices," he said

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Tip for the return of the global economy to «zero square»

Friday 14 June 2019 36

 

Capitals / agencies

The global financial crisis took place in 2008 against the backdrop of the bankruptcy of Lehman Brothers, which led to the turmoil of the financial markets in addition to the downward trend that dominated the global economy at the time. The crisis has prompted major central banks around the world to resort to quantitative easing programs that inject liquidity into markets to drive the economy and boost growth.

But a few years ago, central banks gradually moved away from these stimulus policies and monetary tightening in line with strong growth in the global economy, while the elimination of loose monetary policy was accompanied by signs of a global economic slowdown amid trade and geopolitical concerns.

This uncertainty prompted central banks to change their hawkish rhetoric and raise the banner of "waiting and waiting" until further notice for fear of entering a global recession.

 

Economic slowdown

If this economic slowdown becomes too severe, countries may need more stimulus measures to boost economic growth.

The International Monetary Fund (IMF) cut its forecast for global economic growth this year for the third time in six months due to growing trade tensions and monetary policy conditions.

The IMF expects the world economy to grow 3.3 percent this year, 0.4 percent lower than its October 2018 forecast.

 

Proposed plans

In early 2019, global central banks resorted to changing their hawkish tone to become more cautious while postponing some of the proposed tightening plans.

The Federal Reserve cut its forecast for this year's interest rate hike to zero after it had been expected to raise it twice with its announcement to stay within the "patience with anticipation" policy.

The Fed is setting interest rates at 2.25 to 2.50 percent this year after raising it nine times since the start of the monetary tightening cycle in 2015, including 4 times last year alone.

In this context, the bank has slowed the pace of reducing the balance sheet of the federal beginning of May and to be finalized in September.

The Fed's decision comes after several criticisms by US President Donald Trump of the bank's policy on raising interest rates, saying it was hurting the economy.

But the financial markets expect the Federal Reserve to cut interest rates twice by the beginning of next year, to support growth and thwart the prospects for a slowing economy.

Looking at the ECB, hinting at the timing of interest rate increases at historically low levels turned towards postponement of these plans.

 

European Central Bank

At the recent ECB meeting, the bank pledged not to change its monetary policy until at least the first half of 2020 after it had intended to modify it by the end of this year.

At the same time, bank president Mario Draghi, who leaves office later this year, put forward the idea of cutting interest rates by suggesting that the ECB is ready to cut interest rates or implement other measures if needed.

Earlier this year, the ECB expressed its intention to launch a new series of long-term and cheap refinancing of banks from September 2019 to March 2020. On the other hand, the Japanese government has shown its willingness to implement a flexible policy in the event of escalating economic risks in an effort to preserve Recovery of the economy.

Elsewhere, central banks moved in a large number of emerging markets to cut interest rates amid concerns about the strength of the global economy and trade tensions.

While Turkey's central bank continues to set interest rates at 24 percent since the September 2018 meeting but is also open to adjusting the monetary policy stance based on new data or information.

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The removal of the Governor of the Central Bank of Turkey and the appointment of his deputy instead

 

The headquarters of the Turkish Central Bank in Ankara. "Reuters"

Arab and international Economy News Baghdad A presidential decree published in the official gazette showed that Turkey isolated the governor of the central bank early on Saturday and appointed his deputy instead. The decree stated that Governor Murad Gintinkaya was sacked and his deputy, Murad Oysal, was replaced. Views 25   Date Added 07/06/2019