Turkish lira hits new high amid rate hike talk

Marco Green
September 13, 2018

The president said: "We are solving the issue of rent in foreign currency, which concerns a lot of our vendors, once and for all".

Economists and business analysts said the ruling was unlikely to have any permanent positive impact on the Turkish economy.

Rental and sale agreements in Turkey are often offered in euros and dollars to foreigners living in the country.

"Around 70 percent of the rental contracts in shopping malls are in foreign currency", Hulusi Belgu, chairman of the council of shopping centres told Reuters.

The decision also covers contracts for business and services. The lira has traded in a narrow range since Monday after the central bank last week signaled potential action to stem consumer-price growth that has accelerated to the fastest in 15 years.

In a series of steps to cushion the fall of lira, Turkey has limited derivative transactions, lowered leverage ratios in trading, and required Turkish exporters to convert the bulk of their overseas revenue into lira.

Turkish President Tayyip Erdogan has appointed himself chairman of the country's sovereign wealth fund and completely changed its board, naming Finance Minister Berat Albayrak as his deputy, the country's Official Gazette said on Wednesday. "They act according to the Central Bank's decisions and there are now rates as high as 50 percent in practice", Erdoğan said, underlining that such sharp profits could only be gained through narcotics.

Turkey's Central Bank (CBRT) has raised its benchmark one-week repo interest rate by 625 basis points from 17.75 percent to 24 percent, the Monetary Policy Committee said Thursday in a statement.

The dollar/lira exchange rate fell 6.3512 by around 14.30 local time (1130 GMT), down 1 percent.

Other reports by Click Lancashire

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