Turkish Central Bank
The Central Bank of the Republic of Turkey (CBRT) on Monday announced that the bank will continue to use all available instruments in pursuit of the price stability objective.
"The Central Bank will take the necessary actions to support price stability," the bank said.
The announcement came following the release of the inflation report for August by the country's statistical authority TurkStat.
According to TurkStat, consumer prices in Turkey rose 17.90 percent on a yearly basis last month while the annual inflation was 15.85 percent in July.
A U.S. law firm hired by Turkey to look into state-owned Halkbank's dealings with Iran found that it did not violate U.S. sanctions, Turkey's finance minister told Reuters, and Ankara does not expect the bank to face any fine.Law firm King and Spalding and data firm Exiger carried out the investigation after a Halkbank executive was charged in New York last year with taking part in a scheme to help Iran evade U.S. sanctions.The executive was found guilty and sentenced in May to 32 months in jail, a decision which Turkey dismissed as politically motivated."All Iran foreign trade related data, emails and related documents required for the investigation were presented for examination for the U.S. firms," Treasury and Finance Minister Berat Albayrak said."As a result of a months-long independent examination, it has been established that the bank had not violated primary and secondary U.S. sanctions against Iran."Albayrak also said the U.S. Treasury's Office of Foreign Assets Control (OFAC), which enforces U.S. economic sanctions, had been constantly informed of Halkbank's Iran trade.Turkey’s central bank to support price stability"We do not expect a fine on Halkbank," he added, predicting that the bank would emerge "completely clean" from the process. "Anything otherwise would be a completely political decision."Referring to Turkey's wider standoff with the United States, Albayrak said Washington had taken it to a point that did not benefit "the U.S. state or people".A dispute over the detention and trial on terrorism charges of a U.S. evangelical pastor prompted President Donald Trump to impose sanctions on two Turkish ministers and double tariffs on Turkish metal imports.The two NATO allies are also divided over policy in northern Syria, Ankara's plans to buy a Russian missile defence system and new U.S. demands for countries to halt oil purchases from Iran, a major source of Turkey's energy imports.Turkey's manufacturing index at 46.4 points in AugustTurkey's central bank independent, will take necessary steps Turkey's central bank is independent of government and will take all necessary steps, Finance Minister Berat Albayrak told Reuters.The bank will hold its next rate-setting meeting on Sept. 13, after leaving rates on hold in late July. Since then, it has responded to the lira's plunge to record lows in August by tightening liquidity.The bank said on Monday it would take necessary actions to support price stability and it would adjust its monetary stance at next week's meeting. The statement came after inflation surged to nearly 18 percent year-on-year in August.Erdoğan proposes to trade without US dollarAlbayrak said that the bank, at its last meeting, said it would look at the markets and at price stability and "would not hesitate to take the necessary steps", in coordination with government fiscal measures.He also said that, since President Recep Tayyip Erdoğan's re-election in June, monetary and fiscal policy were closely aligned, strengthening the bank's hand.The lira has fallen some 40 percent against the dollar so far this year."The central bank in Turkey has been maybe more independent than those in other countries, and it will continue this period by taking steps to continue this independence," Albayrak said.
Turkey expects no fine for Halkbank: FinMin
Turkey’s Purchasing Managers’ Index (PMI) for the manufacturing sector reached to 46.4 points in August due to a slowdown in output and new orders, a closely monitored business survey revealed on Monday.An Istanbul Chamber of Industry PMI Manufacturing Index report conducted in cooperation with London-based global data company IHS Markit showed a 2.6-point drop last month from July, signaling an easing in business conditions in the sector."Output and new orders slowed on the back of exchange rate weakness, which also contributed to record rises in both input costs and output prices," the report read.It said deceleration in both output and new orders have become more significant compared to the previous month as a reflection of the challenging demand conditions.The report added that new export orders increased for the second successive month.A reading greater than 50 indicates the sector is growing, while a reading below 50 signals a contraction.
Turkey's manufacturing index at 46.4 points in August
"Recent developments regarding the inflation outlook indicate significant risks to price stability," the CBRT said, adding:
"Accordingly, in line with the previous communication, monetary stance will be adjusted at the September Monetary Policy Committee Meeting in view of the latest developments."
At the bank's sixth Monetary Policy Committee meeting this year, on July 24, the CBRT kept its one-week repo rate -- also known as the bank's policy rate -- constant at 17.75 percent.
According to the bank's schedule, the next three meetings are to be held on Sept. 13, Oct. 25, and Dec. 13.