Cenbank Is Set To Raise Interests Paid To Banks When Fed Hikes Rate

– Governor of Turkish Central Bank, Erdem Başçı, stated that, they would raise the interest rates they pay for forex required reserves of the Turkish banks, when the US Federal Reserve (Fed) starts the rate hike.

Dollar fell below 2.77 lira to 2.7644 lira level, after Başçı's remarks on the interest rates, which prevously hit 2.7855 liras exceeding 2.78 lira level, on Fed's statement on keeping the door open for a possible start interes rate hike after its September meeting.

Having spoken on the 3rd inflation report meeting, Başçı said that Fed is expected to lift the interests by 25 or 50 basis points, announcing their intention to boost their interest, in that case.

Başçı also declared the possibility that demand of a broad interest rate corridor could gradually fall, depending on the developments. “Then we will consider revising our interest policy” added Başçı.

Başçı’s statement also pointed out to the changes in currency required reserve ratio, adding that long run loans have started to be recognized.