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Turkey Rate Hike Fails to Halt Lira Bleeding as Stocks Slump

Turkey Rate Hike Fails to Halt Lira Bleeding as Stocks Slump (Bloomberg)

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.

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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.

Turkey Rate Hike Fails to Halt Lira Bleeding as Stocks Slump (Bloomberg)

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.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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