Turkey hikes rates to rescue lira

The Turkihs central bank said the one-week repo auction rate would go from 10.25 percent to 15 percent. (AP)
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Updated 20 November 2020

Turkey hikes rates to rescue lira

  • One-week repo auction rate would go from 10.25 percent to 15 percent

ANKARA: Turkey’s central bank hiked interest rates on Thursday to support its battered currency.
The regulator raised its benchmark rate to 15 percent from 10.25 during its Monetary Policy Committee (MPC) meeting.
The move is seen as a show of willingness to ensure price stability under the bank’s new governor, former Finance Minister Naci Agbal.
But analysts urged caution and warned further steps were needed.
“In the periods ahead, all factors affecting inflation will be taken into account and the tightness of monetary policy will be decisively sustained until a permanent fall in inflation is achieved,” the central bank said.
Turkey had long resisted investor calls to raise interest rates to support the tumbling lira.
But with the bank’s reserves being rapidly depleted and with the Turkish lira hitting record lows, an increase in interest rates is now seen as the only option for the country’s economy, which desperately needs  foreign investment.
Nigel Rendell, director at Medley Global Advisers in London, said markets were encouraged by the central bank’s decision to return to a conventional monetary policy.
“The CBRT (central bank) found itself in a corner, particularly given the comments last week from (President) Erdogan about reducing inflation into single digits. If the bank had disappointed the market, and only raised rates by a couple of hundred basis points, the lira would have been trading on the weaker side of eight against the dollar within minutes,” he told Arab News.


HSBC to axe 82 branches in UK, cut services in others

Updated 19 January 2021

HSBC to axe 82 branches in UK, cut services in others

  • The lender said it would be left with 511 branches in the UK following the closures

LONDON: HSBC said on Tuesday it planned to axe 82 branches in Britain this year after a drop in footfall across its retail network and a surge in digital banking.
The lender said it would be left with 511 branches in the UK following the closures, with many of the remaining branches set to be refurbished with some providing fewer services.
The COVID-19 pandemic has dented bank finances, putting pressure on lenders to cut costs, while more customers have opted to bank online as people have been encouraged to stay at home to combat the spread of the virus.
HSBC said it had begun trialing different branch formats and decided to provide fewer full-service branches focused in large cities and towns, with others providing cash or self-service technology.
The bank said ‘pop-up’ mobile branches would also be rolled out later this year.
“The direction of travel is really quite clear and this is borne out by the reduction in branch usage and increase in digital interaction that we are seeing first-hand,” said Jackie Uhi, HSBC UK’s head of network.