Turkey's current a/c deficit below forecast in April

Turkey's current account deficit for April spurs hopes for further interest rate cuts

Turkey's current a/c deficit below forecast in April

Turkey's current account deficit in April was lower than expected, according to official figures which spurred hope for further interest rate cuts from the Central Bank.  

In Turkey's Central Bank statement on Thursday, the current account deficit in April was $4.79 billion, approximately 0.2 billion lower than the estimated 4.97 billion in Anadolu Agency's Current Account Deficit Expectation survey.

Recent calls from the government, and particularly from Prime Minister Erdogan, have urged the central bank administration to lower interest rates. Prior to 30 March local elections, interest rates were drastically increased due to the political turmoil.

Compared to April 2013, the current account deficit in April 2014 decreased by $3.32 billion and fell to $4.79 billion while the annual current account deficit stood at $56.79 billion.

On 22 May, the central bank reduced its one-week repurchase rate from 10 percent to 9.5 percent - a tactic which is utilized to increase the economy's money supply. It, however, was widely evaluated as an insufficient move to reduce the strain on private and public investments.

The central bank administration has vowed to keep interest rates high for a while until the outlook on inflation recovers - a move which has incited further criticism from the government.

The markets will be watching the upcoming statements on the 24 June closely from the central bank and the monetary policy committee meeting after the recently released unexpected growth, inflation outlook and foreign trade data.

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Last Mod: 12 Haziran 2014, 13:01
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