clearn.png
Monday October 3rd, 2022 7:11AM

Turkish central bank lowers interest rate to 12%

By The Associated Press
Related Articles
  Contact Editor

ISTANBUL (AP) — Turkey’s central bank delivered another interest rate cut Thursday, moving the opposite way from world economies that are raising rates to combat soaring inflation.

The Central Bank of the Republic of Turkey lowered the benchmark rate by 1 percentage point to 12%. The lira was trading around 18.38 against the dollar, weakening further than the previous record low of 18.36 in December.

The depreciation of Turkey's national currency is likely to intensify the financial worries of residents who have seen their purchasing power erode during a series of economic shocks in the country.

Turkey has followed President Recep Tayyip Erdogan’s unorthodox belief that high interest rates cause high inflation, cutting borrowing costs despite consumer prices rising by an eye-watering 80.21% in August from a year earlier.

Central banks around the world are taking the reverse action in line with traditional economic thinking, aggressively raising rates to target soaring inflation.

The U.S. Federal Reserve hiked rates by a large three-quarters of a point for the third consecutive time Wednesday, followed Thursday by the Swiss National Bank’s biggest hike ever to its key interest rate. The Bank of England is weighing how aggressively Thursday to act as banks from Europe to Canada move quickly to rein in rising prices.

Official Turkish statistics released this month showed annual inflation was the worst among the Group of 20 major economies, but independent experts say inflation is actually much higher.

Critics also say the independence of the central bank and the official statistical institute have been undermined under Turkey's presidency.

Last year, the currency kept hitting record lows as the central bank lowered interest rates from 19%. When it finally hit 18.36 against the dollar, Erdogan announced extraordinary measures that he claimed would safeguard the lira.

The government encouraged people to swap their dollars for the lira and place them in a deposit account that would give the interest rate plus any lira depreciation against the dollar. Though the lira rebounded after that announcement to a high of 11.09, it steadily declined this year.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Trump docs probe: Court lifts hold on Mar-a-Lago records
A federal appeals court has lifted a judge’s hold on the Justice Department’s ability to use classified records seized from former President Donald Trump’s Florida estate in its ongoing criminal investigation
7:29AM ( 6 minutes ago )
Puerto Rico struggles to reach areas cut off by Fiona
Hurricane Fiona left hundreds of people stranded across Puerto Rico after smashing roads and bridges, with authorities still struggling to reach people four days after the storm smacked the U.S. territory, causing historic flooding
7:28AM ( 8 minutes ago )
UK government lifts fracking ban despite opposition
Britain’s government has confirmed it is lifting a ban on fracking in England, arguing that the move will help boost the country’s energy security following Russia’s invasion of Ukraine
7:26AM ( 9 minutes ago )
Associated Press (AP)
EU talks up Russia sanctions but consensus may prove elusive
European Union officials say the world's biggest trading bloc is determined to impose more sanctions on Russia
6:44AM ( 52 minutes ago )
UK government formally confirms lifting of fracking ban
Britain’s government has formally confirmed it is lifting a ban on fracking in England, arguing that the move will help boost the country’s energy security following Russia’s invasion of Ukraine
6:14AM ( 1 hour ago )
Swiss central bank enacts biggest-ever hike to key rate
Switzerland’s central bank has carried out the biggest hike ever to its key interest rate
6:07AM ( 1 hour ago )
AP Business
UK businesses laud energy relief, but costs still a struggle
Pubs, restaurants, breweries, retailers and other businesses across the United Kingdom are being pushed to the brink by skyrocketing energy bills
2:24AM ( 5 hours ago )
Asia stocks follow Wall Street down as Fed fights inflation
Asian stock markets have followed Wall Street lower after the Federal Reserve delivered another big interest rate hike and raised its outlook for more to cool galloping inflation
1:47AM ( 5 hours ago )
Powell's stark message: Inflation fight may cause recession
The Federal Reserve delivered its bluntest reckoning Wednesday of what it will take to finally tame painfully high inflation: Slower growth, higher unemployment and potentially a recession
12:01AM ( 7 hours ago )
AP Business - Economy
Steel plant defenders, Putin ally exchanged in prisoner swap
Ukraine has completed a high-profile prisoner swap that culminated months of efforts to free many of the Ukrainian fighters who defended a steel plant in the port of Mariupol during a months-long Russian siege
8:55PM ( 10 hours ago )
Russian separatists release 10, including 2 US veterans
Relatives say two U.S. military veterans who were captured while fighting alongside Ukrainian forces are among 10 people released by Russian-backed separatists in a prisoner exchange
6:10PM ( 13 hours ago )
EXPLAINER: How do we know when a recession has begun?
The Federal Reserve sent a sobering message after it announced its latest big interest rate hike: It plans to keep raising rates as long as it takes to conquer the worst inflation bout in decades — even at the risk of causing a recession in the process
4:37PM ( 14 hours ago )
AP Business - Financial Markets
Drowning island nations: 'This is how a Pacific atoll dies'
Heads of state from Tuvalu and the Marshall Islands have launched a “Rising Nations Initiative” as they race toward solutions to a rising ocean level that will make their countries all but uninhabitable in the coming decades
2:24AM ( 5 hours ago )
AP: Probe finds evidence of bank boss' romance with top aide
Investigators say they found evidence a former Trump official who heads Latin America’s biggest development bank carried on a romantic relationship with his chief of staff
1:21AM ( 6 hours ago )
Puerto Ricans desperate for water after Fiona's rampage
More than a half million people in Puerto Rico remain without water service three days after after Hurricane Fiona slammed the U.S. territory
11:05PM ( 8 hours ago )
AP Business - Industries
Wall Street CEOs appear on Capitol Hill as election looms
In what has become an annual ritual, the CEOs of the major U.S. banks are appearing in front of Congress this week, to sell themselves as shepherds of a helpful industry at a time of financial and economic distress for many Americans
12:53PM ( 18 hours ago )
Instagram disrupted across Iran amid protests
Iranians saw their access to Instagram disrupted following days of mass protests over the death of a woman who was detained by the morality police
11:06AM ( 20 hours ago )
Wall Street futures modestly higher ahead of Fed rate call
Futures on Wall Street were modestly higher Wednesday ahead of a widely expected interest rate hike by the Federal Reserve as the central bank tries to tamp down the worst inflation in 40 years
8:43AM ( 22 hours ago )
AP Business - Financial Services
UK government lifts fracking ban despite opposition
Britain’s government has confirmed it is lifting a ban on fracking in England, arguing that the move will help boost the country’s energy security following Russia’s invasion of Ukraine
7:26AM ( 10 minutes ago )
Walmart, Target begin holiday early to ease inflation sting
Walmart and Target plan to begin offering deals and price matching offers earlier this year to keep up with Americans pressed by soaring inflation and looking for ways to take the sting out of holiday shopping
7:25AM ( 11 minutes ago )
Fugitive in massive Navy bribery case caught in Venezuela
A Malaysian defense contractor nicknamed “Fat Leonard” who orchestrated one of the largest bribery scandals in U.S. military history has been arrested in Venezuela
7:15AM ( 21 minutes ago )
Bank of England rate hike avoids more aggressive step
Britain’s central bank has raised its key interest rate by another half-percentage point, avoiding more aggressive steps to tame inflation that the U.S. Federal Reserve and other banks have taken
7:10AM ( 26 minutes ago )
Federer, Nadal to team up in doubles at Laver Cup on Friday
Roger Federer and Rafael Nadal will team up in doubles at the Laver Cup on Friday in what Federer has announced will the final match of his long and illustrious career
7:02AM ( 34 minutes ago )