Turkey Rate Hike Hasn't Arrested Lira Slide. History Shows Why
- Russia’s Nabiullina rewarded with inflows, low volatility
- In 2014, other central bankers used example set by Turkey
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Turkish President Recep Tayyip Erdogan finally conceded to his financial lieutenants’ currency-rescue plan, but a look back across recent eleventh-hour rate hikes in emerging markets shows it’s not enough to get the lira back on track.
It took three years for Russian Central Bank Governor Elvira Nabiullina to reap rewards for her ultra-orthodox monetary policies, through an influx of investment and low volatility. Argentina saw immediate payoff for its extreme rate move this week -- of more than double Turkey’s 300 basis-points hike.