Turkey hikes interest rates in another sign of economic normalcy. But markets expected more
Turkey’s central bank raised its key interest rate Thursday, another sign of commitment to a traditional path of battling inflation but still falling below expectations after critics blamed President Recep Tayyip Erdogan’s economic policies for inflaming a cost-of-living crisis. The 2.5 percentage point hike — putting the rate at 17.5% — came a month after the bank unleashed a 8.5% increase, a reversal after more than a year of rate-cutting prompted by Erdogan. He believes lowering interest rates fights inflation, contradicting traditional economic theory that says the opposite. Central banks around the world have been hiking rates