ISTANBUL: Turkey’s central bank said on Tuesday it decided to strengthen monetary tightening to contain a deterioration in the inflation outlook and said that if needed it will deliver further monetary tightening. In a statement after raising its lending rate but leaving the policy rate on hold, the bank also said necessary liquidity measures will be taken if there is unhealthy pricing behaviour in the foreign exchange market.
The lira has fallen some 8 percent this year, adding to double-digit declines in 2015 and 2016. Investors have been unnerved by insecurity, political uncertainty and a slowing economy and worry the central bank is less than independent. President Tayyip Erdogan, who wants cheap credit to boost growth, has long been opposed to high interest rates and the central bank has resorted to unorthodox liquidity moves, heightening the perception it wants to avoid a sharp rate hike.
