ANKARA
The U.S. Federal Reserve will not raise interest rates this week, Turkey's Economy Minister Nihat Zeybekci predicted Monday.
Speaking to reporters at Milan Expo 2015, Zeybekci said any rate rise would increase the demand for dollars, causing the dollar to rise in value. The next interest rate decision is due on Thursday.
Zeybekci, who is responsible for Turkey's foreign trade, said an increase in the value of the dollar would not be sustainable for the American economy, its exports or production in the long-term.
“So I think that the Fed will not raise interest rates this week, in this period,” he said. “Even if it raises [them], it will be a very minimum level. The markets have already priced in the increase.”
Zeybekci added: “I do not believe in the need for an intervention in the decline of the [Turkish] lira against the dollar by increasing interest rates in Turkey. Eventually, the market will handle this. We will see together in the near future.”
The lira has lost more than 28 percent of its value against the dollar this year.
On Monday, the currency fell to a historic low of 3.068 against the dollar as pressure on emerging market currencies from an expected interest rate hike by the Fed grew.
