Israeli consumer prices fell more than analysts expected in January as a drop in owner-occupied housing costs led price declines in almost all index categories.
The Turkish lira was the weakest among European emerging market currencies against the dollar as inflation rose to the highest rate since October.
Morgan Stanley says the Turkish central bank will raise interest rates today, a move that could prove futile for bolstering the tumbling lira given risks the graft crisis embroiling the government will escalate.
A Turkish rate cut tomorrow would be a “risky experiment” that could jeopardize the central bank’s inflation goals, according to Morgan Stanley & Co. economist Tevfik Aksoy .
Israeli consumer prices rose more than expected in October because of increased costs for fruit and vegetables, and clothing, the Jerusalem-based Central Bureau of Statistics said today.
Turkish inflation slowed more than expected in April to the lowest level in two years, boosting expectations of looser monetary policy and sending bond yields to new record lows.
The Bank of Israel may intervene in the foreign currency market more aggressively as the shekel’s gain is posing a risk to growth in the export-driven economy, according to Morgan Stanley.
The Bank of Israel left the benchmark lending rate unchanged in its first decision since the cabinet approved Karnit Flug as governor, as it assesses the impact of last month’s cut.
Finance Minister Yair Lapid canceled plans to increase income taxes next year in a measure designed to spur growth, hours after the Bank of Israel held the benchmark interest rate at 1 percent.
Turkish bond rose, with yields falling for the first time in three days after inflation unexpectedly slowed in November.
"Currency appreciation is something that needs to be dealt with via structural measures and quite possibly via the setting up of a sovereign wealth fund."
- Tevfik Aksoy on Oct 28, 2013