Azernews.Az

By Bloomberg

Turkey’s central bank announced in advance possible measures it may take at its meeting next Wednesday, a verbal intervention that has failed to stop the lira’s slide to a record low.

At their meeting on April 22, policy makers will discuss lowering the cost of lending in foreign currencies to commercial banks, as well as a “a measured” increase in the amount of interest payments made to lenders for their required lira reserves, the bank said in a statement on its website today. The lira briefly reversed losses to a gain after the statement, before sliding again to a record low on a closing basis.

While the statement didn’t mention a possible change to benchmark interest rate levels next week, it said “other measures to support the stability in financial markets” would be considered. Persistent criticism from President Recep Tayyip Erdogan, who says excessively high interest rates are damaging the economy, means the bank has probably taken that option off the table as it fights lira depreciation, according to William Jackson, emerging markets economist at Capital Economics in London.

“It’s apparent that the monetary policy committee isn’t willing to raise official policy rates,” Jackson said in e- mailed comments on Tuesday. “Today’s unusual decision by the Turkish central bank to publish the agenda for this month’s rate-setting meeting indicates that the MPC is looking for ways to tighten monetary conditions and shore up the lira without incurring the wrath of President Erdogan.”

The bank’s statement came after the lira fell to a record 2.6873 per dollar. The currency was trading 0.1 percent weaker at 2.6731 per dollar at 3:36 p.m. in Istanbul.