ISTANBUL
The Turkish lira versus US dollar exchange rate soared to highest level in eight months on Thursday after new home sales in the U.S. surged in August to their highest level in more than six years, a sign that the housing recovery is making progress.
The lira/USD exchange rate climbed to 2.249 levels at 01:30 p.m. (1130GMT) Thursday from the 2.235 seen just before the announcement of the six-year high for new home sales on Wednesday.
Stronger-than-expected economic indicators spur investors' anticipation of earlier-than-expected interest rate hikes and push the value of dollar to higher levels.
Also Thursday, Turkey's Central Bank has left its benchmark interest rate at 8.25 percent once again in its September Monetary Policy Meeting as it did last month, as well.
“The Monetary Policy Committee has decided to keep the short term Interest rates constant at the following level for one-week repo rate at 8.25 percent,” said a statement on the Central Bank's website.
The Central Bank's interest rate decision was closely observed by markets amid anticipations for earlier-than-expected U.S. interest rate hikes, a surge of value in the value of the U.S. dollar, and recent adverse economic figures in Turkey.
“Inflation expectations, pricing behavior and other factors that affect inflation will be closely monitored and the tight monetary stance will be maintained until there is a significant improvement in the inflation outlook,” the Central Bank's statement said.
The committee’s decision to leave rates on hold had been widely expected, as Turkey's recent macroeconomic indicators such as unemployment, growth and inflation were slightly disappointing.
www.aa.com.tr/en
