CBRT defies investors with rate cut, crisis risks mount

The sharp falls in the lira over the past few days clearly weren’t enough for Turkey’s central bank to stand up to President Erdogan as it pushed ahead with a 100bp cut (to 15.00%) to its one-week repo rate. While the CBRT did signal that the easing cycle would probably end in December, there is still a large risk that a self-fulfilling cycle takes hold that pushes the lira to even greater depths.
Jason Tuvey Senior Emerging Markets Economist
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