Turkey has shocked markets with a 100 basis point interest rate cut despite inflation of nearly 80 per cent, as the central bank loosens policy further to spur growth ahead of a general election next year.
Memo to self: stop complaining about US inflation.
Sahap Kavcioglu, the central bank governor, supports President Recep Tayyip Erdogan’s unusual theory that high interest rates cause inflation, while mainstream economists subscribe to the opposite view.
Who knows. Yesterday I was convinced the universe was created by the Big Bang.
“With this decision, the central bank of Turkey drops any residual pretence to be targeting inflation and reveals its overarching goal of supporting growth. With inflation at 80 per cent, however, this recipe only spells disaster,” Cristian Maggio, head of emerging markets strategy at TD Securities, wrote in a note.
Then again, maybe the Big Bang makes sense.
AW, still learning something new every day. Yesterday I learned there isn’t a chance I’ll be able to play Tico-tico No Fuba on the guitar. OK, I kind of knew it, but it was confirmed when I got the sheet music.