عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Turkish Central Bank Raises Interest Rates to 40%

Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
TT
TT

Turkish Central Bank Raises Interest Rates to 40%

Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
Turkish Central Bank raised interest rates double the expected. (The central bank’s website)

Türkiye’s central bank raised its policy rate by a larger-than-expected 500 basis points to 40% on Thursday, in an unexpected step.
The central bank is expected to raise its policy rate by 250 basis points to 37.5% this week, and reach 40% by year-end, a Reuters poll showed on Monday.
The bank has raised its one-week repo rate (TRINT=ECI) by 3,150 basis points since June.
The existing level of domestic demand, and geopolitical risks keep inflation pressures alive, the bank said following the Monetary Policy Committee meeting.
The committee will determine policy decisions to create the necessary financial conditions for a sustained decline in the underlying inflation trend, aiming to reach the 5 percent inflation target in the medium term.
The improvement in external financing conditions, continued increase in foreign exchange reserves, positive impact of demand rebalancing on current account balance, and the increase in domestic and foreign demand for Turkish lira-denominated assets contribute significantly to exchange rate stability and the effectiveness of monetary policy.
In light of these developments, a decline in the underlying trend of monthly inflation is observed.
Indicators of inflation and underlying trend of inflation will be closely monitored, and the Committee will continue to decisively use all the tools at its disposal in line with its main objective of price stability.
The Committee will continue to make its decisions in a predictable, data-driven, and transparent framework.
According to the monthly consumer tendency survey released by the Turkish Statistical Institute (TUIK), the consumer confidence index in Türkiye was up by 1.1% month-on-month in November this year to 75.5 points.
Sub-indices for the present financial situation of households increased 2.7% and financial situation expectations of households over the next 12 months gained 2.6%.
The index for general economic situation expectations over the next 12 months went up 0.6% in November from the month prior.
On the other hand, assessments on spending for durable goods over the next 12 months fell 0.6%.

Most Viewed

 
 
Business

Gold Retreats as Dollar Firms; Fed Decision Looms

FILE PHOTO: An employee places ingots of 99.99 percent pure gold in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: An employee places ingots of 99.99 percent pure gold in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/File Photo
TT
TT

Gold Retreats as Dollar Firms; Fed Decision Looms

FILE PHOTO: An employee places ingots of 99.99 percent pure gold in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: An employee places ingots of 99.99 percent pure gold in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/File Photo

Gold prices dipped on Monday, pressured by a firmer US dollar, while investors focused on the Federal Reserve's first meeting of 2025 for more guidance on the interest rate path.

Spot gold dropped 0.7% to $2,751.71 per ounce by 0748 GMT, after trading just below record-high levels on Friday. US gold futures fell 0.8% to $2,756.30.

The dollar gained 0.2%, making gold expensive for other currency holders, Reuters said.

"The US dollar could be the main culprit for gold's weakness... However, the current movement suggests that the downside for the yellow metal is still limited, potentially aided by safe-haven flows," IG market strategist Yeap Jun Rong said.

The US and Colombia pulled back from the brink of a trade war after the White House said the South American nation had agreed to accept military aircraft carrying deported migrants.

Gold is considered a hedge against geopolitical turmoil and inflation. It also tends to thrive in a low interest rate environment as it yields no interest.

Fed policymakers are largely expected to keep rates steady at the end of their Jan. 28-29 meeting, marking the first pause in the rate-cutting cycle that began in September.

"Market focus will likely be on how the Fed reacts to comments from President Trump, who has called for continued interest rate cuts," Reliance Securities' senior analyst Jigar Trivedi said.

Data since the Fed's December meeting has kept intact the core view among Fed officials that inflation will continue to move steadily, if slowly, towards 2%, with a low unemployment rate and continued hiring and economic growth.

COMEX gold speculators raised net long position by 21,864 contracts to 234,358 in the week to Jan. 21, data showed on Friday.

Spot silver dropped 1.3% to $30.20 per ounce, palladium dipped 1.8% to $969.83 and platinum fell 0.9% to $940.40.