Two Percentage Point Interest Rate Hike in Turkey

September 24, 2020

Officials at the Central Bank of Turkey made the biggest splash, hiking the one-week repo rate by two full percentage points to 10.25%, which reverses over half of the 375 basis points of reduction engineered earlier this year between January and May. This directional reversal was ostensibly done in light of this quarter’s “markedly” recovering Turkish economy and to “restore the disinflationary process” in light of a “higher-than-envisaged path” of inflation lately. Countering recent lira depreciation is a key goal as well, and the currency overnight rose 1.1% after the announcement from a record low of 7.7201 per dollar beforehand.

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