Inflation at 70%, lira tumbling – but still CBRT holds

Despite the backdrop of inflation at 70% and the lira falling by falling by 10% against the dollar this month, Turkey’s central bank left interest rates on hold at 14.00% today. So long as President Erdogan is in power, rate hikes will remain off the cards and it’s more likely that policymakers turn to capital controls and more strident lira-isation efforts in the event of further pressure on the lira.