Turkish economy minister predicts no Fed rate rise

Turkish economy minister predicts no Fed rate rise

Turkish economy minister predicts no Fed rate rise

AA Photo

The U.S. Federal Reserve (Fed) will not raise interest rates this week or it will only make a slight increase, Turkish Economy Minister Nihat Zeybekci predicted on Sept. 14.

Speaking to reporters at the Milan Expo 2015, Zeybekci said any rate rise would increase the demand for dollars, causing the dollar to rise in value. The next interest rate decision is due on Sept. 17.

He said in the long-term an increase in the value of the dollar would not be sustainable for the U.S. economy, its exports or its production.

“I think that the Fed will not raise interest rates this week, in this period. Even if it raises [them], it will be a very minimum level. The markets have already priced in a rate hike,” Zeybekci added, as quoted by Anadolu Agency. 

The Turkish Lira has lost more than 20 percent of its value against the dollar this year, but the economy minister again spoke out against an interest rate rise in Turkey.

“I do not believe in the need for an intervention in the decline of the lira against the dollar by increasing interest rates in Turkey. Eventually, the market will handle this. We will see together in the near future,” he said. 

On Sept. 14, the lira currency fell to a historic low of 3.068 against the dollar as pressure grew on emerging market currencies from an expected interest rate hike by the Fed.

Meanwhile, Zeybekci also said Turkey’s main target remained full integration with the European Union, with an eye on several international agreements such as the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP).