The central bank cut its one-week repo rate by 1 percentage point to 15%, marking the third straight reduction in interest rates under governor Sahap Kavcioglu from 19% at the start of September. The bank said many factors behind surging consumer prices were “beyond monetary policy’s control” and that it would “consider” ending its cycle of rate cuts this December.
After the decision Turkey’s lira plummeted about 4%, hitting 11 against the US dollar for the first time.
Is this a political move by Erdogan? I do not have a great understanding of Turkish politics, however, Erdogan does not seem to be well liked by Turkish people I know and this decision seems irrational. Erdogan apparently holds the view that high interest causes inflation rather than tame it. Where else has this type of thinking been seen? Is it that common at all? This is the first time I have seen that opinion on interest rates and inflation
https://www.ft.com/content/2db0434d-2851-4485-850d-06cfca32ff22
Submitted November 18, 2021 at 09:41AM by IrishBuckles https://ift.tt/3oHSwmx
