Turkey

Turkey's central bank slashed its policy rate by a more than expected 150 basis points to 10.5% on Thursday, and promised to halt the easing cycle urged by President Tayyip Erdogan after another similarly-hefty cut next month, Reuters reported. The move pushed the lira to a record low and sets up a likely rate cut to 9% next month. It comes after Erdogan repeatedly advocated for the unorthodox easing cycle and specifically called for single-digit rates by year-end.

A Turkish central bank official refused to tell lawmakers the cost of a flagship deposit program introduced by the government to boost confidence in the lira, Bloomberg News reported. Irfan Yanar, head of budget and financial reporting at the central bank, repeatedly declined to give a figure for the FX-protected deposit accounts, which guarantee savings against falls in the lira, according to minutes of a parliamentary commission meeting on Monday seen by Bloomberg.

The three countries that helped Moscow to maintain crude exports in the wake of its invasion of Ukraine appear to be stepping back into the market for Russian barrels, with Turkey taking a lead role in the latest buying, Bloomberg News reported. A marked increase in the volume of crude on tankers that have yet to signal a final destination makes the task of monitoring Russia’s exports more complicated, but most of those vessels end up in India, with a smaller number heading further east to China.

Turkey began rounding up suspects in an investigation into alleged stock market fraud that led to a plunge in equities last month, according to state media, Bloomberg News reported. Istanbul’s chief prosecutor started the probe on suspicion of organized activity that violated Turkey’s capital markets law and issued a detention warrant for 10 people, two of whom remain at large, state news agency Anadolu said on Sunday. The arrests come after a sudden reversal in Turkey’s stock market, where banking equities dropped 39% in a three-week long rout that started on Sept.

Turkey’s central bank delivered another massive interest rate cut Thursday despite eye-popping inflation above 80%, moving the opposite way from world economies that are raising rates to control prices as the lira sunk to record lows, the Associated Press reported. 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.

Some Turkish banks are curtailing corporate lending after the government's latest raft of regulations raised their costs and forced many to cut their balance sheet risks, five banking and private sector sources told Reuters. The new rules, part of President Tayyip Erdogan's unorthodox management of the economy, have especially depressed longer-term lending. The owner of one mid-sized manufacturer said it was "harder and harder every day" to access needed credit.

Turkey is priming a new round of cheap loans for businesses through a government-backed program, according to a person familiar with the matter, promising a fresh dollop of stimulus before next year’s elections to spur growth in an economy at risk of a slowdown, Bloomberg News reported. The government disclosed plans to extend loans under the Credit Guarantee Fund at a closed-door meeting held by Treasury and Finance Minister Nureddin Nebati in Ankara, said the person, who spoke on condition of anonymity to discuss information that isn’t public.

Turkey's central bank unveiled new measures on Saturday meant to address credit availability including higher reserve requirement collateral for lenders, days after it shocked markets with a 100 basis-point interest rate cut to 13%, Reuters reported. It said that the steps were meant to support financial stability and strengthen the monetary transmission mechanism after citing the need to address the widening gap between its policy rate and lending rates when it cut rates on Thursday.

Turkey's central bank is expected to take steps soon to bring lending costs closer to its newly cut policy rate, especially for some corporate loans, three bankers told Reuters, after the bank said spreads between the two rates had widened, Reuters reported. The central bank unexpectedly cut its policy rate by 100 basis points to 13% on Thursday, despite 80% inflation. It cited the widening gap between its policy rate and rising lending rates as having reduced the effectiveness of its monetary policy.

Turkey’s central bank on Thursday lowered its key interest rate despite inflation surging to nearly 80% and making it difficult for people to buy what they need, falling in line with the unorthodox economic views of the country’s president, the Associated Press reported. In a statement following a monetary policy committee meeting, the bank said it decided to reduce the policy rate from 14% to 13%. President Recep Tayyip Erdogan has pressured the bank into lowering borrowing costs in a bid to boost economic growth, investment and exports, insisting that interest rate hikes cause inflation.