Rate Increase Stamped Betrayal Keeps Lira Exposed: Turkey Credit

Arresting the lira’s freefall would require Turkey’s central bank to do something that Prime Minister Recep Tayyip Erdogan says would amount to surrendering to those trying to overthrow him: raise interest rates.

The central bank will keep its three main rates unchanged at next week’s meeting, according to surveys of economists by Bloomberg. The lira is the world’s worst-performing currency over the past month, tumbling to a record today. The decline has been accelerated by prospects for reductions in U.S. monetary stimulus and a Turkish corruption probe that Erdogan calls a coup attempt. Two-year yields rose the most among 18 emerging markets tracked by Bloomberg since the crisis erupted on Dec. 17.