Turkey’s central bank probably won’t risk a showdown with the government by raising interest rates. Investors say anything less is unlikely to help the world’s worst-performing currency and bond markets.
Governor Erdem Basci signaled last week that he may increase interest payments on required lira reserves for commercial banks and provide foreign-currency loans at a cheaper rate, measures designed to stem the slide in the lira. The median estimate of economists surveyed by Bloomberg is for the bank to leave its three main rates unchanged when policy makers meet on Wednesday.
