Turkey Rate Hike Fails to Halt Lira Bleeding as Stocks Slump
The lira reversed earlier gains after doubling its interest rates failed to assuage concern that Turkey’s economy will be hurt by a slowdown in China and a reduction in U.S. monetary stimulus. Stocks fell even though the Turkish currency depreciated as much as 2.4 percent, after strengthening more than 4 percent following the central bank’s midnight rate hike decision. Yields on two-year benchmark notes decreased 18 basis points to 10.88 percent in Turkey and the Borsa Istanbul 100 Index of shares slumped 2.3 percent. Prime Minister Recep Tayyip Erdogan, who said yesterday he’s always opposed higher rates, is embroiled in a graft scandal that has ensnared several ministers and the chief executive officer of a state-owned bank.