Turkey’s lira plummeted by 1% to a fresh low of 2.8943 per dollar and to an new all-time low of 3.2042 per euro after the central bank held rates steady and unveiled a vaguely stated plan to shift to an orthodox monetary stance.
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The list of nine technical adjustments fell short of investor expectations that Turkey’s central bank would be moving toward simplifying its monetary policy framework, one of the world’s most complex. “The central bank’s decision adds insult to injury and pulls the rug out further from under the wilting lira”.
President Recep Tayyip Erdogan is widely expected to call early elections if the Ankara parliament cannot form a coalition by Sunday, the constitutionally mandate deadline.
The central bank left its main rate unchanged at 7.5 percent, as forecast by economists polled by Reuters.
“Generally speaking, the hikes in the policy rate in the coming months will be tied to Fed rate hikes”. In the first six months of 2015, a period with severe fuel price and currency fluctuations, Turkish Airlines grew its net profit by 4,6 times compared to the same period of 2014 with the help of its diversified debt structure and dynamic risk management strategies and recorded 406 million United States dollars net profit.
Turkey’s nationalist opposition rejected a coalition with the ruling AK Party and refused to support a minority government on Monday, further complicating Prime Minister Ahmet Davutoglu’s efforts to break a debilitating political deadlock. “Hope that new elections could be averted seemed to have put a lid on other negative developments, such as the intensification of the conflict with the Kurdish minority”, said Ilan Solot, a currency strategist at Brown Brothers Harriman & Co.in London.
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Chiara Albanese contributed to this article.
