Turkey Central Bank Chief Said to Promise Greater Visibility
Turkey’s Central Bank Chief Said to Promise Greater Visibility
(Bloomberg) -- Turkey’s new central bank governor has told lenders he will offer clearer guidance on monetary policy, according to people with direct knowledge of the conversations, building on President Recep Tayyip Erdogan’s reassuring messages about a return to orthodoxy.
In meetings with banking executives this week, Governor Naci Agbal pledged closer communication and foreseeable policies after they said they had been vexed by the lack of predictability over the past two years, according to the people, who spoke on condition of anonymity because the matter is sensitive. The bank executives were encouraged by his comments, the people said.
In recent years, state lenders unsuccessfully tried to support the collapsing lira with unannounced interventions in foreign-exchange markets, and the previous governor, Murat Uysal, presided over a series of surprise rate decisions.
Agbal has been broadcasting market-friendly messages in discussions with lenders, suggesting a more hawkish stance on policy and promising increased accountability and cooperation, the people said. Erdogan himself on Wednesday pledged to support market-friendly policies, signaling a cease-fire with international investors after the lira crashed last week and he revamped his economic team.
Lutfi Elvan was installed as the new treasury and finance minister on Tuesday to replace Erdogan’s son-in-law, Berat Albayrak, who resigned.
The currency has rallied on the changes, rising as much as 1.5% to 7.6844 per dollar to become the best performer among emerging market currencies as of 2:50 p.m. in Istanbul.
“There’s a growing expectation of large scale hikes next week, and of a return to orthodoxy and predictability,” said Cristian Maggio, head of emerging-market strategy at TD Securities in London. “Both are sticking points for the market and, yes, they have triggered the rally we are currently seeing.”
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