Turkey Central Bank Chief Agbal Says no Rate Cuts for a Long Time this Year


New governor Naci Agbal does not expect Turkeys central bank to begin considering cutting interest rates from 17 until much later this year given upward pressure on already high inflation, and rate hikes are still a possibility, he told Reuters.

In his first interview since taking the reins three months ago, Agbal said the central bank intends to move ahead of the market, including swiftly hiking rates if there is any sign that inflation, now 15, might drift higher than expected.

His comments, including the revelation that Turkey is no longer seeking currency swap lines with foreign counterparts, could reinforce a growing view among investors that the bank is in no rush to start easing policy despite calls for lower rates from Turkish President Tayyip Erdogan.

It does not seem possible to put interest rate cuts on the agenda for a long time this year, Agbal said, noting that consumer prices are set to edge higher for a few months before slowly declining to the banks forecast of 9.4 by yearend.

If any new data that we come across indicates a risk of deviating from the mediumterm target path in inflation expectations and pricing behaviour, we will tighten further in advance, he said at the banks new headquarters in Istanbul.

Erdogan appointed Agbal as part of a shock leadership overhaul a day after the lira touched a record low in early November. The Turkish president also pledged a new marketfriendly economic era.

The central bank has since hiked rates to 17 from…

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