US dollar falls under 2.9 liras, Fed gives ‘wait’ signals for interest rate hike

ISTANBUL - Doğan News Agency

REUTERS photo

The U.S. dollar opened the day under 2.9 Turkish Liras on Oct. 9 and declined to around 2.89 liras, the lowest level in the last 1.5 months, as the U.S. Federal Reserve (Fed) gave signals that it would wait further before raising interest rates.

The committee minutes of the Fed meeting held on Sept. 16-17 and released on Oct. 8 included evaluations signaling that the Fed would wait before announcing a hike in rates. The Fed minutes revealed the extent to which policymakers are concerned that the recent global economic slowdown might threaten the U.S. economic outlook. 

Although they said that overseas turmoil had not “materially altered” economic prospects, they opted to hold rates steady last month.

“In their view, although the time for policy normalization might be near, it would be appropriate to wait for information, including evidence of further improvement in the labor market, confirming that the outlook for economic growth had not deteriorated significantly and that inflation was still on a path to return to 2 percent over the medium term,” said the minutes.

Following the announcement, the U.S. dollar, which has weakened against many global currencies, also declined against the lira.