Turkey Rattles Investors With Interest-Rate Cut Despite Rapid Inflation

·2 min read
Turkey Rattles Investors With Interest-Rate Cut Despite Rapid Inflation

Turkey's currency dropped toward record lows, its bonds sold off, and investors moved to price in a higher risk of sovereign default, after the country's central bank unexpectedly cut interest rates. The cut in Turkey’s benchmark interest rate, to 13% from 14%, came as a surprise to analysts who expected it would be held steady as Turkey deals with high inflation and economic implications of the Ukraine war. Turkish President Recep Tayyip Erdogan believes—contrary to economic orthodoxy—that cutt