Turkey and India raise interest rates

Turkey raised interest rates late on Tuesday in a bid to support its currency. Bloomberg reports:

Turkey’s central bank raised all its main interest rates at an emergency meeting, resisting political pressure and reversing years of policy, after the lira slid to a record low.

The bank in Ankara raised the benchmark one-week repo rate to 10 percent from 4.5 percent, according to a statement posted on its website at midnight. It also raised the overnight lending rate to 12 percent from 7.75 percent, and the overnight borrowing rate to 8 percent from 3.5 percent. The lira extended gains after the announcement, adding 3 percent to 2.18 per dollar at 1 a.m. in Istanbul.

Earlier on Tuesday, the Reserve Bank of India had raised its repurchase rate to 8.0 percent from 7.75 percent.

The Federal Reserve began a two-day monetary policy meeting on Tuesday and is expected to announce further cuts to its bond-buying programme on Wednesday.

That is notwithstanding some mixed US economic data released on Tuesday.

Durable goods orders fell 4.3 percent in December. Orders excluding transportation fell 1.6 percent while non-defence capital goods orders excluding aircraft fell 1.3 percent.

However, the Conference Board's consumer confidence index rose to 80.7 in January from 77.5 in December and the Standard & Poor's/Case Shiller home price index rose 13.7 percent in November from a year ago, the largest increase since February 2006.

Meanwhile, in the UK, GDP grew 0.7 percent in the fourth quarter to push the full year growth rate to 1.9 percent, the fastest since the financial crisis.

UK growth is likely to continue at the beginning of 2014. A composite indicator from the Confederation of British Industry rose to +30 in the three months to January from +26 in the three months to December.