Turkish Central Bank will not 'raise interest rates in 2010'

Recent inflation figures suggest that Turkish Central Bank will not raise interest rates this year or even in the first quarter of 2011, economists foresee.

Turkish Central Bank will not 'raise interest rates in 2010'

 

Recent inflation figures suggest that Turkish Central Bank will not raise interest rates this year or even in the first quarter of 2011, economists foresee.

Turkey's consumer price index dropped by 0.56 percent month-on-month in June making a year-on-year rise of 8.37 percent, country's statistics authority Turkstat said on Monday. Government's target is to achieve 6.5 percent annual inflation at the end of the year.

Murat Salar, a board member of Orion Investment, said that CPI for June was far below expectations, adding that such figures reaffirmed last week's decline in bond interests.

"We do not expect the Central Bank would raise interest rates in the last quarter," Salar said. "We do not expect it to raise rates also in the first quarter of 2011."

Turkish Central Bank keeps interest rate unchanged at record low 6.5 percent since November 2009.

CPI drop puts the bank at ease, Salar said, adding that recent figures suggest a continued upward trend in country's economy.

"However, the Constitutional Court ruling is expected this week on referendum. The only thing markets will focus is whether there will be an early election or not.

Otherwise, markets are not interested in what the constitution contains or which law will get enacted," he said.

Turkey awaits country's top court's decision after an appeal by the main opposition CHP seeking annulment of government-sponsored constitutional amendment package which passed in the Parliament in May.
 

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Güncelleme Tarihi: 05 Temmuz 2010, 13:34
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