Turkish Central Bank Raises Key Rate 24 Percent

The bank announced the decision in a statement after the bank’s Monetary Policy Committee (MPC) meeting on Sept. 13.

The European stock exchanges took their momentum off the Asian stock markets on Thursday, building on their friendly day-to-day outlook.

A US-proposed new round of talks with China to alleviate the deadlocked trade conflict between the world’s two largest economies had a positive impact, pushing prices the day before.

Even if a solution to the dispute is far from close, the search for a dialogue suggests that further escalation is not imminent, said analyst Michael Hewson of CMC Markets UK.

The EuroStoxx 50, the eurozone’s benchmark index, recently gained 0.37 percent to 3338.79 points. For the Paris Cac 40, it was 0.30 percent high at 5348.02 points. Meanwhile, the London FTSE 100 was 0.18 percent lower at 7300.16 points.

The trading day is dominated by the central bank meetings. In the early afternoon, the Bank of England (BoE) and the Turkish Central Bank announce their interest rate decisions, followed by the European Central Bank (ECB). Experts predict that the ECB will keep interest rates at the record low of zero percent. More interesting is the question of how to proceed with the multi-billion dollar bond purchase program.

In Turkey, market observers anticipate a sharp rise in the Turkish lira and a sharp rise in inflation with a significant increase in interest rates. In the UK, according to experts, should not be turned on the interest rate screw.

Turkish Central Bank raises key rate by 625 basis points to 24 percent

“The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement. Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered,” it said.

A hike from the previous level of 17.75 percent was widely expected, but there were varied expectations about the new interest rate.

The Turkish lira steeply gained ground against the U.S. dollar after the decision, hitting the lowest level in two weeks with 6.01.

The strongest sector in the European Stoxx 600 sector overview was auto sales, up 1.4 percent, which was counteracted by the tariff dispute between China and the US. The papers of the German manufacturers Volkswagen, BMW and Daimler were among the best in the Eurostoxx with price gains of up to 2 percent. The weakest sector was the media sector with minus 0.7 percent.

In London, after presenting business figures, Morrison’s securities showed fluctuations between plus and minus. Finally, they stood slightly lower. The turnover of the supermarket chain met the expectations on the market. Thanks to another special dividend, the interim dividend also increases. The positive development of the company after its problems some years ago goes on, stated analyst Hewson. At the “Footsie” top, the papers of the online supermarket chain Ocado won 1.8 percent.