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IPFS News Link • Turkey

Lira Crashes To All Time Low After Turkey Shocks With 200bps Rate Cut Despite Soaring Inflation

•, by Tyler Durden

To be fair, the writing has been on the wall for the past three years, ever since Turkey's authoritarian ruler and de facto central bank head Erdogan started firing Central Bank governors any time they refused to cut rates to fight inflation in compliance with Erdoganomic, a reminder of which we got just last week when Erdogan fired three more Turkish central bankers, sending the lira plunging...

... in a move which we suggested that one way or another, Erdogan wants hyperinflation, and currency collapse.

So fast forward to this morning when central bankers, knowing they would lose their jobs if they didn't slash rate by even more than the market expected (and the market expected a generous 50-100bps) cut despite the highest inflation in over two years (the latest CPI print came in at 19.58%), had no choice but to slash and they did just that and Turkey's Central Bank cut its one-week repo rate by 200bps, from 18% to 16%, double what consensus expected (15 of 26 economists in Bloomberg's survey expected 17.00%, with the rest expecting a 50bps cut), arguing inflation is "transitory" if adding that it has limited room left for further reductions this year (actually no, it will keep cutting because that's what Erdogan wants).