Turkey On the Pathway To Destroy The Value In Its Currency

An electronic board displays exchange rate information at a currency exchange bureau in Istanbul, Turkey, on Monday, Aug. 29, 2022. Nicole Tung, Bloomberg

Bloomberg: Turkey Shocks With Another Rate Cut Despite Raging Inflation

(Bloomberg) -- Turkey’s central bank delivered another shock cut to interest rates, despite inflation running at a 24-year high and with the lira trading at a record low.

The Monetary Policy Committee led by Governor Sahap Kavcioglu lowered the benchmark to 12% from 13% on Thursday, surprising most economists surveyed by Bloomberg.

The lira extended declines after the announcement and was trading 0.2% weaker against the dollar as of 3:02 p.m. in Istanbul.

Turkey is charting an economic strategy in defiance of mainstream monetary policy. It’s already been an outlier for much of this year, as the world’s central bankers unleashed the most aggressive tightening in decades, and stood out even more this week as countries like Indonesia and Brazil raised rates.

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Update #1: Turkey cuts interest rates again as country struggles under 80% inflation (CNBC)

Update #2: Inflation-hit Turkey Cuts Rate For Second Month (Barrons)

WNU Editor: This is what you do to not only destroy your currency, but to suffer through incredibly high infaltion rates .... Turkey’s lira hits a new record low against the dollar as investors brace for another rate cut (CNBC).