Turkey C.bank pledges monetary policy move against FX fluctuations

Turkey C.bank pledges monetary policy move against FX fluctuations

Mubasher: Turkey’s central bank said it would take a monetary policy action, if the impact of foreign exchange (FX) fluctuations on price stability lasted for long.

The bank would not stand indifferent “the exchange rates are at odds with economic fundamentals,” Central Bank of Turkey (CBRT) said on Wednesday in its “Monetary and Exchange Rate Policy for 2019.”

Last year, the CBRT vowed to react duly with its instruments to FX movements, without referring to any potential change to its monetary policy.

“Verbal intervention is a major part of any central bank’s policy armor,” BlueBay Asset Management strategist Tim Ash said, adding that “they cannot always wait for the signal to act from above, they need to make decisions themselves.”

Moreover, the CBRT plans to hold eight monetary policy meetings next year, unchanged from this year.

The next monetary policy meeting is slated for 13 December.

The central bank also maintained its inflation target at 5%, plus or minus 2% in each direction, while it estimated inflation at the end of this year at 23.5%.

By 12:12 pm GMT, the Turkish lira (TRY) rose 0.73% to TRY 5.3466.