Economics
Bank Chief Picked by Erdogan Returns to Policy Mainstream
- Naci Agbal appointed this month amid policy-making overhaul
- Erdogan has vowed to support more market-friendly approach
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Turkey’s central bank took a major step back toward mainstream policy making with the tacit endorsement of longtime skeptic President Recep Tayyip Erdogan, raising interest rates by the most in over two years and spurring a rally in the currency.
The Monetary Policy Committee led by Governor Naci Agbal on Thursday lifted the one-week repo rate to 15% from 10.25%, as forecast by most analysts polled by Bloomberg. The move brings the benchmark 20 basis points higher than the central bank’s weighted average cost of funding, which Oxford Economics said “translates into a symbolic tightening.”