MARKETS

Turkish lira weakens ahead of expected central bank rate cut

In July, the central bank slashed the rate to 19.75 percent from 24 percent in its first policy change since September 2018. (File photo: AFP)

The Turkish lira weakened on Thursday as investors weighed up prospects for a central bank policy setting meeting where the bank has been forecast to cut its policy rate by 250 basis points.

At 0540 GMT, the lira stood at 5.7575, weakening from a close of 5.7450 on Wednesday. The monetary policy committee decision will be announced at 1100 GMT.

A Reuters poll showed on Tuesday that the one-week repo rate will be cut to 17.25 percent this week and be lowered to 16 percent by year end as the bank continues an easing cycle meant to help lift the economy from recession.

In July, the central bank slashed the rate to 19.75 percent from 24 percent in its first policy change since September 2018. Last year, a currency crisis chopped 30 percent from the value of the lira and sent inflation soaring to a 15-year high above 25 percent.

The bank is expected to follow up with another aggressive move and cut its policy rate by 250 basis points, the median estimate in a Reuters poll of 23 economists showed. Estimates ranged from cuts of 175 to 450 basis points.
 

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Last Update: Thursday, 12 September 2019 KSA 08:53 - GMT 05:53
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