FED Announcement Shakes Turkish Markets

The FED’s announcement confirmed expectations that the interest rates, which were increased by a quarter point for the seventh time since June 2004, are to be increased more rapidly in the next period. This situation precipitated an increase in developing markets, including Turkey, during the last two weeks. The dollar strengthened to below 1.30 euros abroad and climbed to 1.370 YTL on the internal markets.

Furthermore, the core index of consumer prices announced yesterday (March 23) grew by its highest margin in the last five months with a 0.3 percent rise in February. This development caused the dollar to strengthen. The Euro/dollar exchange rate fell below the 1.30 mark to 1.2984.