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.
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