Turkey’s central bank on Thursday hiked its key interest rate by another 250 basis points to 45%.
The hike to the benchmark one-week repo rate was in line with economists’ expectations.
It comes amid an ongoing battle against double-digit inflation for Turkey’s monetary policymakers, with the rate hike the latest step in that effort.
Inflation in Turkey increased to 64.8% year-on-year in December, up from 62% in November, and the country’s currency, the lira, hit a new record low against the U.S. dollar earlier in January, breaking 30 to the greenback for the first time.
Analysts predict this will be the last hike for some time, especially with local elections approaching in March.
I mean, Turkey is no stranger to inflation. When I was there in 2000 before revaluation, it was something like a million old lira = $1.
Turkey fucked themselves after years of what can best be described as intentionally choosing every single wrong answer in economics 101.
Because of what someone wrote hundreds of years ago.
Not just economics, socially he has done everything he can to fuck over minorities.
Yikes, apparently I missed that things got this bad. wtf happened?
Fascists crash economies. Despite what the Marxists will tell you, fascism is terrible for capitalism. The only way fascists are ever able to show a profit is by stealing the gold out of people’s teeth.
Do Marxists say that fascism is good for the economy? Fascism is what happens when capitalism runs out of steam. It’s like the death throes of capitalism. The ruling class trying to maintain power over a population disenchanted by the realities of capitalism.
Yeah I agree with you.
Erdoğan happened.
Inflation was bad for a while and Erdoğan insisted in lowering interest rates because he thought they cause inflation.
What changed that now they are rising them? Did he admit he was wrong?
What changed that now they are rising them? Did he admit he was wrong?
Erdogan won the election in May. So now he’s dealing with the “find out” phase of fucking around and ignoring economists telling him that lowering interest rates to fight inflation was like fighting a fire by pouring napalm on it.
Hiking interest rates don’t cause inflation, they cause your electoral support to go down. He won a close election, so now he can fix the problem without loosing power.
“fix”
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Thanks Erdogan.
Yeah, his belief that lowering the interest rate was the way to fight inflation didn’t workout. Now they’re using the traditional interest rate hike tactic and that’s going to hurt.
For those not familiar with this language a “basis point” is .01 of a percentage point. So in this example:
“Turkey’s central bank on Thursday hiked its key interest rate by another 250 basis points”
…would mean an interest rate hike of 2.5%.
To put that into perspective, the USA’s Prime Interest rate (which mortgages, bank loans, and credit card rates are derived) is currently 8.5%. If the USA raised the Prime Interest rate by 2.5% making Prime Interest rate 11% there would be huge HUGE economy impacts. Entire industries overnight would become nonviable. The slow home sales right now would grind to a near absolute halt. Millions of Americans that are servicing revolving debt would see their monthly payments see large increases.
wtf so why turkey did that?, what’s the objective?
Because erdogan is a fucking moron, he lowered rates and it resulted in higher inflation so now he’s just doing the opposite after he fucked it even more
It costs more to borrow money so consumers and businesses borrow and spend less and when people spend less it drives down price fighting inflation…more or less the thinking
So -20% real interest rate. No way that could cause inflation…
Erdogan and his central bank head think raising interest rates causes inflation.
Holy shit! I remember hearing things were bad a while back, but those numbers are insane. Good luck getting out of that hole.
Turkey’s inflation seems to almost follow moors law.
