Turkish lira sinks following Erdogan’s interest rate remarks
2024.12.30 05:44
Investing.com — The Turkish lira has been noted as the poorest performer among emerging-market currencies on Monday. This comes in response to President Recep Tayyip Erdogan’s recent comments on interest rates, which have sparked concerns about a potential return to his past unconventional monetary policies.
The lira experienced a 0.6% drop against the dollar, which has resulted in a year-to-date depreciation of approximately 16%. In comparison, the MSCI’s EM currency index remained largely unchanged on Monday and is just slightly in the red for 2024.
President Erdogan made a statement indicating that interest rates would definitely decrease next year. He added that “2025 will be the mark year for this.” This comment followed the Turkish central bank’s first policy rate cut since 2023.
Despite warnings from officials against a continuous easing cycle, analysts are now predicting rate reductions at every policy meeting in 2025.
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