ERDAL SAĞLAM - Market forces Central Bank to raise interests

ERDAL SAĞLAM - Market forces Central Bank to raise interests:

"The Central Bank has not increased interest rates for a long time despite the demand of the markets; however, developments experienced in the short term capital exit, the increase of the domestic demand for foreign currency, together with the upward tendency of the inflation rate are all putting pressure on the Central Bank.

Market players have been saying for a long time a period has started when a global liquidity exit would begin and interest rates should be increased as a precaution. Despite this, the Central Bank did not increase interests; moreover, the corruption and bribery probe was added to this fragile environment, as well as the state crisis that followed it. The Central Bank, despite this increasing vulnerability, again refrained from increasing rates. This situation has been interpreted in all markets as, “The Central Bank cannot make the decision to raise interest rates in order not to trouble the government before elections.”

Now, almost everybody agrees because the Central Bank cannot act independently and does not raise the rates in order not to trouble the government, this situation aggravates the panic in the markets. "

'via Blog this'