Neşe Karanfil/ Turan Yılmaz - ANKARA The government is working on a scheme to lower interest rates by reducing the Treasury’s borrowing requirement, and the new model is expected to be announced by President Recep Tayyip Erdoğan “within 15 days,” according to sources close to the matter. Top members of the country’s economic administration have reportedly been holding meetings since April 2 on the issue. One of the key targets of the plan will be measures to both lower interest rates and attract investments, sources said, adding that this would help the Treasury realize lower costs. Erdoğan is known as an enemy of high interest rates and has repeatedly warned banks to lower rates, controversially arguing that high rates are the cause of inflation. “The interest rate is both the mother and the father of inflation,” Erdoğan said most recently during a speech on March 31. “Anyone attempting to act against this will … [Read more...] about Turkish gov’t working on plan to lower interest rates: Sources
Interest rates
BNR, on keeping the interest rate stable: We need to ensure inflation reduction, but also futher economic growth
Inflation will not exceed 5 percent by much and afterwards will go down, said the governor of the National Bank of Romania, Mugur Isarescu. This is the main explanation why the BNR decided to keep the policy rate unchanged at 2.25 percent. “What we are looking for is a mix of policies, both monetary and fiscal, in order to ensure inflation reduction and further economic growth”, said Isarescu. “But not every monetary policy decision counteracts fiscal policy decisions”. The head of BNR showed that “a good treatment doesn’t only mean what medicine is needed, but also in what dosage should be applied”, that being the essence of today’s decision. Based on data and figures in the economy and in the markets, the central bank is taking steps aimed to keep inflation under control. On the other side there is the fiscal policy decided by the government, which has its own mandate, given by the voters. So, there must be a balance between the … [Read more...] about BNR, on keeping the interest rate stable: We need to ensure inflation reduction, but also futher economic growth
Romania to Persist With Europe’s Steepest Interest-Rate Hikes
Economists see Romania extending the European Union’s steepest run of interest-rate increases.A majority of analysts in a Bloomberg survey says the Black Sea nation’s central bank will raise its benchmark for a third straight meeting on Wednesday, to 2.5 percent. The outcome may not be so clear-cut, according to Governor Mugur Isarescu, who said last week that the hikes to date will help bring inflation back to target.As Europe’s economic recovery propels growth in the continent’s ex-communist east, Romania followed the Czech Republic in lifting borrowing costs to contain consumer prices. The Czechs have already raised rates three times, though over a longer period, while the European Central Bank is so far just unwinding stimulus measures. Isarescu is grappling with the fastest inflation in five years and eastern Europe’s most rapidly expanding economy.“There are few arguments for the central bank to take a pause in the hiking cycle,” said … [Read more...] about Romania to Persist With Europe’s Steepest Interest-Rate Hikes
Savers Rejoice: Your Interest Rate Is About to Climb
First banks widened the gap between what they pay you and what borrowers pay them. Now they will fight for your money. By April 3, 2018, 5:00 AM EDT Hold your horses, savers.The Federal Reserve raised its benchmark lending rate a few weeks ago, the sixth such increase since 2015. So far, banks have been quick to pass on those hikes to borrowers—though without offering anything extra to long-suffering depositors. Watchful consumers might see headlines about the Fed raising rates, then look at their bank statement and wonder, “What about me?”There is indeed a disconnect between the Fed’s rate hikes and the interest on your savings. Years of stubbornly low rates have made U.S. banks reluctant when it comes to boosting offers on deposit accounts. First, they want to benefit from a fatter margin between what they charge for loans and what they pay to you, the consumer, who provides the funds.But before you start shopping around for a … [Read more...] about Savers Rejoice: Your Interest Rate Is About to Climb
Bank of Ghana Cuts Key Interest Rate to Four-Year Low of 18%
Ghana cut its benchmark interest rate to the lowest in four years as inflation is slowing toward the central bank’s target.The Bank of Ghana reduced the rate by 200 basis points to 18 percent, Governor Ernest Addison told reporters in the capital, Accra, on Monday. Underlying inflation pressures are subdued, he said.Lower borrowing costs may further boost expansion in Africa’s fastest-growing economy. While inflation at 10.6 percent in February still exceeded the 6 percent to 10 percent target band, the rate has almost halved in the last two years and a stable cedi could help rein in price growth even further.“The inflation outlook is favorable because of lower crude prices, a 30 percent cut in electricity tariffs and a stable currency,” Courage Martey, an economist at Databank Group, said by phone before the announcement.The bank has lowered the key rate by 800 basis points since 2016.— With assistance by Simbarashe Gumbo … [Read more...] about Bank of Ghana Cuts Key Interest Rate to Four-Year Low of 18%