The Turkish lira jumped today as the central bank’s chief hinted that interest rates should be higher to rein rising inflation. It is just another sign that the trend for monetary easing across the world is waning.
Erdem Basci, Governor of the Central Bank of the Republic of Turkey, demonstrated a hawkish tone in today’s speech, saying:
We won’t refrain from implementing permanent policy tightening if needed.
It is not uncommon for central banks of emerging economies to consider monetary tightening, as was demonstrated today by the Reserve Bank of India. And as in the case of the RBI, Turkey’s central bank also wants to raise interest rates because of high inflation.
USD/TRY was down from 2.2860 to 2.2543 as of 19:43 GMT today.
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