Turkey slashed interest rates on Thursday, sending the lira tumbling to a new record low and amplifying concerns President Recep Tayyip Erdogan’s fixation on low borrowing costs will worsen already acute inflation.
The central bank cut its one-week repo rate by 1 percentage point to 15 per cent, marking the third straight reduction in interest rates under governor Sahap Kavcioglu from 19 per cent 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 per cent, hitting 11 against the US dollar for the first time.
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