Turkey Shocks Markets by Slashing Rates Despite Soaring Inflation, Currency Tumbles
The Turkish central bank is plowing ahead with more cuts to the national interest rate, even as the inflation of the Turkish lira continues to accelerate to unforeseen levels.
On Thursday, Turkey shocked markets when it announced a new interest rate cut that would reduce the benchmark to only 13 percent, after seven months in which the benchmark remained flat at 14 percent.
Turkish President Recep Tayyip Erdogan promised last June that he would continue his regimen of rate cuts, even as inflation continues to surpass new records and forces the Turkish economy to make hard adjustments to the new norm. In the past month, companies including Vodafone and Citigroup have shifted to hyperinflation accounting practices in their Turkish operations….