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By the Finance Policy Committee.



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By the Finance Policy Committee.

Wednesday 24 July, 2019

The decision to cut interest from the ACCC meeting began in September, and the Board will provide important messages on how the process works after the high level of policy implemented. However, PPK will have three more meetings by the end of the year. Not only tomorrow's meeting, but the total interest rate cut at the last meeting at the end of December will affect inflation, the exchange rate and the current account balance.

At the top of the economic agenda at the Turkey Monetary Policy Committee (MPC) meeting in Turkey. The new Central Bank of Turkey (CBRT) in the Republic of Turkey has decided to attend a summit in Murat for the first time, with interest rates expected.

The main reason for this is that economic indicators do not imply interest rates. Let us remember that the Presidential Decree, which was published on July 6, was rejected by former President Murat Netanyahu. President Recep Tayyip Erdogan told the press that his dismissal was due to a disagreement with the interest policy. Erdogan is known for his frequent mention of the rate of inflation. The most important example to remember is Erdogan in the year 2000; May 15, 2018 is a meeting with London investors in London. At the meeting, Erdogan reiterated that inflation is the cause of inflation. After the meeting, Deputy Prime Minister Mehmur and Central Bank Governor Mura Muratot had to fall on London streets to convince the investors. However, since lightning and Cetinkaya’s summer 2018 crisis hit some proprietary shocks, inflation has been a priority in many indicators and Turkey’s economic impact.

May Since 2004, Turkish law has been forced to take action against the central bank, led by Tehrania, with inflation and inflation. May The APNP, which was met on September 13, 2018, has been released. He raised the policy by 625 points above market expectations. With this increase, the interest rate of 17.75% increased to 24%. Although inflation and dollar exchange rates declined, the MPC did not affect interest rates considering the country's economy. So what the committee is expected to do on July 25th. A reduction in the rate of interest that can be withdrawn from the board is important in the coming months and a general economic outlook. We will answer these questions after tomorrow's meeting. It should also be noted that minutes of the meeting will be published in detail after one week. Before the conference, let's look briefly at the structure, activities, and political implications of the MPC.

What is the monetary policy on the face of it?

In the Central Bank Act, PPK is a member of the Vice President, an elected member of the Council of Banks, and a Member appointed by the President on behalf of the President. The Deputy Minister of the Treasury and the Finance Minister or the supervising body appointed by the Minister must attend meetings without voting.

MPC;

  • Determining the principles and mechanisms of monetary policy to ensure price stability.
  • Establish inflation with the government in the framework of the monetary policy strategy.
  • At times, to prepare reports on monetary policy objectives and practices and to inform the public on principles to be adopted by the government;
  • The Turkish Lira is allowed to take necessary measures to keep the internal and external value of Turkey in sync with the government and to identify the currency exchange regime in order to identify the corresponding foreign exchange rates and gold rates.

Until 2017, the MPC held regular meetings once a month in the calendar. However, because of the election of the 8 Central Assembly Banks in some of the nation's central banks, especially the Federal Reserve (Fed); The same calendar application for international consensus purposes. If an informal meeting is to be held, the meeting will only be held at the invitation of the Central Bank Chairman. The central bank chairman is critical when MPs' actions and members are taken into account.

Policy Center Center: Central debt.

One of the most important topics in economic debates is the presidency of the Central Bank and the independence of CBRT. When Murati ኪያ was appointed head of the Central Bank of Turkey, Turkey, he had never met the criteria for studying finance, economics or banking. Applicable law was amended at the time of the inquiry and there were allegations that his name was unique. Why Putinyaya was chosen was compatible with political power. However, after the business began to deteriorate in the summer of 2018, P.K.K. Çetinkaya is a member. Interest rates have increased, in contrast to inflation, similar to interest rates.

Then, inflation began to decline in line with current trends. Instead of an increase in foreign exchange, Treasury Secretary and Treasury Minister Berrakebacher reiterated the fact that President Erdogan's interest rates will inflate inflation, noting that the current account deficit is due to a drop in export revenue. Finally, the process of expulsion of the politically powerful Attikinki, due to not following President Erdoጋan's orders, was completed. The process started by politics was completed again in politics. We do not know whether Çetinkaya is completely removed from the governor and the interest policy or at a discounted price.

Although the former CBT governor said that Putinya was opposed to the interest reduction, the conditions for appointment were similar and the year 2000 He did not appeal inflation late in 2018. Therefore, the integrity of the president's position in relation to the airport for the first time after the appointment of interest should be questioned. It should not be forgotten that Erdem Başçı, former CBRT governor of Putinyaya, was not able to meet the inflation expectations given his dismissal. After fulfilling his legal duties, he was appointed permanent representative of the OECD.

Ustalk, who replaced Ethankin, in a statement to the press after his appointment, may have been more flexible. Therefore, tomorrow's meeting will be an important test for him to ensure his flexibility and compliance. Will the PPK decision open the pipeline?

The decision to cut interest from the ACCC meeting began in September, and the Board will provide important messages on how the process works after the high level of policy implemented. However, PPK will have three more meetings by the end of the year. Not only tomorrow's meeting, but the total interest rate cut at the last meeting at the end of December will affect inflation, the exchange rate and the current account balance.

Considering the MPC equipment, it should be considered that the scope of the board is limited. In other words, a fall in policy interest rates will guarantee that the payment pipeline will be opened at the same time and does not guarantee policy rates. The main reason for this is the gap between the real economy and the policy rate. This means that there is a bad credit crisis, especially with construction and automotive. Indicates non-payment of credit. More than $ 50 billion in damage was done to the oil sector alone. Given the low volatility in the housing market, it is clear that when the leaves are inactive in the automotive sector and when companies take steps toward declining rates, it is clear that banks are looking at factors other than policy interest, namely the financial aid themselves. Particularly in Europe, although the policy rate is negative or zero, banks' lack of credit is an example of the restriction of policy interest. Therefore, policy rates should be down, loan pipelines open and the most difficult time in the economy should come to cold blood as a "statement of individuals."

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