February 20, 2012
Lira in Focus as Turkey's Central Bank Meets
Snip ~ Istanbul, Turkey's central bank meets to set interest rates Tuesday with the lira touching a near-six month high, stoking speculation that policy makers will boost dollar-buying auctions to rebuild reserves and limit the currency's rapid rise.
After shoring up the currency, Turkey's central bank governor in January boasted that the lira would be "one of the currencies gaining the most in 2012," and would "continue to appreciate this year because the central bank will let it appreciate."
The lira has risen some 8% against the dollar since the beginning of the year, making it one of the world's most rapidly appreciating currencies. But policy makers have expressed concern that a rapid strengthening could make Turkey's exports less competitive.
Many economists have also stressed that the lira's march could still be halted by lingering market nerves over the economy's weakness and skepticism over Turkey's increasingly unorthodox monetary policy.
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