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Tue, 21 Jan 2020 00:13 GMT

Turkey Raises Interests Rates to Minimise Losses

Business

Hisham Ahmed

Sat, 28 Apr 2018 06:35 GMT

Turkey’s Central Bank increased one of its main interest rates on Wednesday, for the first time this year, as the nation expects snap elections in June.

Observers see the Turkish decision as an attempt to minimise the lira’s losses and limit any political damage to President Recep Tayyip Erdogan.

The monetary authority raised its highest interest band by 75 basis points to 13.5%, amid concerns about the Turkish economy’s performance.

The decision came as the lira remains one of the world’s worst performing currencies this year, losing 7% of its value against the dollar and exacerbating inflationary pressures.

Turkey was the fastest growing economy in the G20 last year when it expanded by 7.4% on the back of state spending and government incentives intended to reverse a downturn triggered by the failed 2016 coup attempt.

The lira rose 1% to 4.0475 against the dollar on Wednesday afternoon. The previous week saw it hit an all-time low of 4.1944 against the dollar; it has devalued 13.9% since August.

Middle East