Turkish policymaking worsens, CEE currencies slip

Interventionist policymaking in Turkey has come back onto the radar this week. This is likely to lead to a misallocation of resources and adds to the reasons to think that the country’s next crisis could prove to be much worse than last year’s. Meanwhile, Central and Eastern European currencies came under pressure amid mounting concerns about the effects of loose policy. We think that more pain lies in store over the next few years.