Turkey’s Rate Hike Is Sticking a Band-Aid on Gaping Wound

The collapse of the lira will squeeze spending power for those living in Turkey, and higher interest rates will hurt as well. The cost of borrowing from the late-liquidity window is the most important rate set by the central bank as it currently operates as the marginal cost of finance in Turkey. Bloomberg Economics expect inflation to remain well above consensus forecasts in the country this year, staying in the double digits.

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