Central Bank governor insists on 1.92 remark

GENEVA – Anadolu Agency

Turkish Central Bank Governor Erdem Başçı has maintained that the dollar to Turkish Lira exchange rate will be 1.92 by the end of this year, stepping up a gear from his previous remarks.

The governor had previously said the public should not be surprised if the rate – which rose to a historic high of 2.07 last week – was at 1.92 “or even higher” before the year’s end.

“I’m defending my statement. The dollar/lira currency will be 1,92 at the end of the year,” Başçı said yesterday in Geneva, speaking after a meeting of Central Bank chiefs.

Many analysts have been warning of the risks of adopting a bold approach by the Central Banks, as its duties may require steps back according to changing circumstances.

However, the Bank looks like it is aiming to soothe the jitters among investors and maintain calmness, to decrease the volatility of the stock market and the lira against small shocks. It has been tightening monetary conditions through an unorthodox mix of repo auctions and changes in its interest-rate corridor, without hiking interest rates.

The bank had said its priority was to maintain interest rate stability and to control inflation at desired levels, so the foreign exchange reserves have been its main tool to tackle the lira’s slide in the past few weeks.

In his remarks yesterday, Başçı also reasserted his confidence in Turkey’s $132-billion worth foreign exchange reserves.