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Weekly Lists
July 27, 2018 www.intellinews.com I Page 27
bne:Credit Turkish central
bank has ‘bowed’ to executive president Erdogan
Georgian central bank reduces policy rate
The Turkish central bank has “bowed” to the unorthodox monetary policy of President Recep Tayyip Erdogan, Capital Economics concluded on July 24.
As the markets digested the stunning decision of the regulator’s monetary policy committee (MPC) to leave rates on hold despite the collapse of the Turkish lira (TRY) and the burden of annual inflation at a 14-year high of 15.39%, Jason Tuvey, senior emerging markets economist at the macroeconomic research company, said in a note to investors: “The Turkish central bank’s decision to leave its one-week repo rate unchanged at 17.75%, when most had expected at least
a 100bp hike, suggests that President Erdogan is already using his strengthened position [as Turkey’s first ever executive president] to influence monetary policy. The lira has sold off following the decision and another emergency rate hike now appears to be on the cards.”
The National Bank Of Georgia (NBG) reduced its policy rate by 25 basis points to 7.0% on July 25, the bank said in a statement.
The NBG noted that the reduction of the policy rate will continue but at a slower pace than previously envisaged as inflationary pres- sures have eased.
The inflation rate remained close to the target level of 3%, amount- ing to 2.2% in June. As a result of the rapid strengthening of the nominal effective exchange rate, inflationary pressure is reduced, the NBG said.
Meanwhile, economic activity increased significantly in the first half of 2018, with real growth reaching 6.1% in January-June according to preliminary data.
Standard & Poor's affirmed the Czech Republic at 'AA-/A-1+' for both its foreign and local currency sovereign credit ratings in a scheduled review on July 20.
The stable outlook reflects the rating agency's expectation that strengthening domestic demand, the government's fiscal space, and the Czech National Bank's monetary flexibility will counterbal- ance risks to the small open economy.
It also signalizes that S&P is not going to change the rating in near future.
The public debt should remain at a low level and the average growth of GDP should be 2.4% in the next four years.
S&P's affirms Czech Republic 'AA-/A-1+' foreign and local currency ratings