Turkish Central Bank hikes interest rate to 24%

The president will oversee financing for large state development projects

The president will oversee financing for large state development projects

On Friday, Chinese Foreign Minister Wang Yi said the current world trade system was not ideal and Beijing supported reforms to it, including to the World Trade Organisation, to make it fairer and more effective.

Rental and sale agreements are often conducted in foreign currencies in the retail sector, and also to foreigners living in Turkey.

The Monetary Policy Committee led by Governor Murat Cetinkaya on Thursday increased the one-week repo rate by 625 basis points to 24 per cent, more than the median estimate in a Bloomberg survey that called for a hike of 325 basis points.

After rising as high as 6.1442 to the dollar, the lira eased slightly to 6.0768 on Friday.

Independent experts say Turkey should increase rates to help stem the selling pressure on the currency, as higher returns would entice worldwide investors.

The embattled currency has fallen by 40% this year amid a lack of interest rate hikes to control inflation.

While a drop in safe-haven demand sent the yen down 0.2 per cent to 111.47 per dollar, the euro hovered around US$1.1620 as the European Central Bank kept its interest rates deep in negative territory as widely expected.

Currently, the interest rates are below the annual inflation level in Turkey. He repeated however, his belief that interest rates should be cut, calling them an "instrument for exploitation".

Guillaume Tresca, senior emerging market strategist at Credit Agricole said the economy needed to slow down because it was overheating and that an interest rate rise was needed to cap lira depreciation.

Even if this is a step in the right direction, the crisis of lira is not over.

Analysts say the lira's plunge last month had been sparked by a combination of concerns over domestic policymaking and a crisis in relations with the United States (US).

Washington has imposed sanctions on two Turkish ministers for not releasing American pastor Andrew Brunson, who faces terrorism-related charges in Turkey.

Turkish lira banknotes are seen in this picture illustration in Istanbul, Turkey August 14, 2018. "If you say 'inflation is cause, the rate is the result, ' you do not know this business, friend".

Bank of England Governor Mark Carney told ministers Britain's property market could crash and mortgage rates spiral up if there was a chaotic no-deal Brexit, the Times newspaper reported.

"Ultimately, I think if you're buying long-term in Turkey, it shouldn't really be an issue".

Both actions came after Erdogan named himself the head of the country's nascent sovereign wealth fund on September 11, giving himself even more control over the country's slowing economy.

Reuters reports the latest comments from Turkey's President Erdogan, with the key headlines found below.

The fund was created in the wake of an attempted coup in 2016 to help fund infrastructure projects and shore up markets.

Tens of billions of dollars worth of state assets, including the wholly state-owned Ziraat Bank, were transferred to it in 2017.

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