Turkey’s Central Bank appears contend with the soft Lira for the present
It is not unusual for Staviridis, NATO’s Supreme Allied Commander, to visit Turkey a key NATO ally. Eight to ten agenda topics easily come to mind, from NATO missile defense, to Libya, Afghanistan, Iraq and the eastern Mediterrean.
Turkey hosts the next meeting of the Libya Contact Group August 25 in Istanbul. It wants to hold a leading position for Libyan humanitarian assistance and reconstruction.
Although Turkish leaders reportedly remain in close communication with Syrian President Bashar al-Assad, their rhetoric is becoming more sharp and critical, approaching a point of breaking with al Assad and calling for his ouster.
Ambassador Ricciardone is a recess appointment as Ambassador to Turkey. Senate confirmation is required if he is to serve in Ankara beyond 2011. His SFRC hearing proceeded smoothly with nothing emerging that would place his speedy confirmation at risk.
The Council’s meetings will conclude on Thursday. Its decisions are expected to be made public after being presented to President Abdullah Gül for approval. The sessions have proceeded without the crisis atmosphere that many had feared following the military’s mass resignations on Friday. The Turkish media, across the board, have referenced the published photographs of Prime Minister Erdogan sitting alone at the head of the Council table as decisive evidence of the shift in political power from the military to civilian authority.
All eyes will be on tomorrow’s report from the extraordinary meeting of the Monetary Policy Committee (Item 1 above). Because it is extraordinary and clearly pre-emptive, it is reasonable to expect Committee action that has policy consequences and is intended to minimize negative spill-over effects for the Turkish economy.
Such unscheduled meetings are rare and indicate that the CBRT is moving into a” crisis management mode” with respect to intensifying economic problems being reported in Europe, the US and globaly. Speculation for Central Bank action focuses on limited easing of domestic economic conditions (e.g. reduction of banks’ reserve requirement or even a small cut in interest rates). Good inflation numbers released in Ankara earlier today may give the CBRT confidence it can ease the monetary conditions without stimulating inflation.
Because Petraeus is not yet confirmed by the Senate as the new CIA director, his contacts in the Turkish capital were limited to the military. He was not permitted to meet with his Turkish intelligence counterpart.
There is publicly expressed suspicion in Turkey that the attack and casualties did not take place as reported. The Turkish military hopes that its inquiry into the attack will help them to manage this mounting public criticism.