Central Bank Did Not Bow Before Erdogan
2014-08-30 13:46:51
The last few days have been very intense in terms of political and economic events. On Wednesday the congress of the Justice and Development Party (AKP) nominated then-Foreign Minister Ahmet Davuoglu (elected almost unanimously) as the new chairman of the AKP, replacing Recep Tayyip Erdogan, who had also nominated him as prime minister. On Friday the new Cabinet, in which Ali Babacan has kept his post of deputy prime minister in charge of economic affairs, was announced by Davutoglu.On Wednesday, while the AKP congress was witnessing the customary diatribes of Mr. Erdogan and those of Mr. Davutoglu, in fact less customary, the Monetary Policy Committee (PPK) of the Turkish Central Bank was deciding not to change its interest rate policy. The PPK kept the one-week repo rate (the policy rate) at 8.25 percent, ending the period of successive cuts that has lowered the policy rate from 10 percent to its current level in three steps. I had already asserted that the last cut of 50 basis point
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