Fitch Ratings Evaluated Turkey’s Monetary Policy

Fitch Ratings Evaluated Turkey’s Monetary Policy International credit rating agency Fitch Ratings, evaluated Turkey's monetary policy. The organization said that it would take time to rebuild the credibility of Turkey's monetary policy. International credit rating agency Fitch Ratings has published a report on Turkey's new monetary policy. Organization stated in its report that Turkey has rebuilt its foreign exchange reserves, the increase of interest this week is an attempt to increase the credibility of monetary policy but it will take time. In the said report, “Central Bank of the Republic of Turkey (CBRT) raised its policy rate on November 19 to 15 percent increase of 475 basis points and is now said that the monetary policies of all funds will be more transparent and provided with a one-week repo rate needed to make predictable and CBRT strongly emphasized its determination to fight inflation.” In the report, which stated that there is a possibility of an improvement in monetary policy credibility with Naci Ağbal's appointment as the head of the CBRT, it was pointed out that the TL has gained approximately 11 percent since Lütfi Elvan's appointment as Minister of Treasury and Finance. “It will take time for the CBRT to restore the credibility of monetary policy. The dismissal of two CBRT presidents in the last 16 months underlines that the CBRT is not independent from political pressure.“ Such a policy tightening will support the external position of Turkey and to the decline in inflation expectations. Moreover, the weakening of the TL contributed to the high inflation rate of 11.9 percent in October and raised inflation expectations.