the price of The Turkish Lira fell after the release of the latest inflation report the Central Bank of Turkey (CBT) again. The notice corresponds to the expectations. There are no negative Surprises.

Why, then, the new pressure on the Lira? According to the Tatha Ghose, a financial analyst of Commerzbank, this is mainly due to the fact that many market players expected that the Central bankers would move to a besonneneren course. Ghose: "some Had suspected that the CBT mentioned in the report, to be increasingly on speeding up the Inflation concern and will tighten monetary policy soon, as long as nothing changes?"

inflation forecast for Turkey is unrealistic,

Exactly the Central Bank. Officially, the bankers to CBT Governor Murat expect Uysal that Inflation will decline steadily. The forecast returns to the end of the year to almost 8 percent until the end of 2021, from 5.4 percent. On the Basis of these forecasts, Uysal also claimed that Turkey can maintain a positive real interest rate. According to Ghose, a completely unrealistic attitude. To be a target of slightly more than 5 percent Inflation, it came to "never". This has, according to the Commerzbank experts for a simple reason: "The CBT does not carry the necessary tightening of monetary policy."

Instead, the Central Bank follows the request of the Turkish President and is a massive money moves in the last quarters of easing. The key rate was lowered from 24 per cent in the summer of 2019 at least, only an 11.25 percent. Erdogan wants to reduce through the low key interest rate, the Inflation and thus boost the economy. Alone: the concept is not. Inflation rose again in December 2019, to 11 per cent. Turkish Lira / Euro (TRY/EUR) 0,1514 EUR -0,0002 (-0,16%) OTC

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Erdogan's Central banker, in the "turbulent environment"

The Central bankers talk to the President still further to the mouth. Ghose: "Uysal makes use of its low inflation forecasts, in order to assert that Turkey has a reasonably positive real interest rate." In fact, the real interest rate turns Negative, the power expenditure on the Bosphorus for international investors uninteresting. But no one cares - at least when it comes to the Turkish Minister of Finance. "Berat Albyrak argued that the nominal interest rate for the Lira is more important than the real interest rate," explains Ghose. Practically, it is the nominal interest rate not adjusted for Inflation.

For Ghose is clear: "Such statements might be okay, as long as the markets are positive. If the markets demand higher interest rates to defend the Lira, could find the CBT again in a stormy environment." For the Commerzbank experts, the choice of the Central banker, then, is crucial, "whether they offer to the President in the forehead and in the interest raise or an uncontrollable volatility of the Lira would like to accept".

also read: Bleak prospects - Due to Erdogan's interest dictates Turkey threatens a new Lira crisis Where is Corona Virus everywhere? Real-time map shows the spread of the disease, FOCUS Online/Wochit Where occurs Corona Virus everywhere? Real-time map showing the spread of the disease

iab Date Of Update: 31 January 2020, 14:00