Economics
Turkish Lira Traders Brace for Higher Rates or Market Rout
- Speculation that the central bank will hike has fueled rebound
- Aberdeen says lira could tumble to 6 per dollar on no hike
This article is for subscribers only.
Turkish policy makers will have to step up to the plate and raise interest rates on Tuesday to restore credibility or face a market rout.
Turkey’s lira and bonds have rebounded from record lows earlier this month on speculation the country’s central bank will look past President Recep Tayyip Erdogan’s calls for lower borrowing costs when it sets policy on Tuesday. With most economists forecasting a hike, Aberdeen Standard Investments says the lira could tumble some 25 percent to an all-time low of 6 per dollar if officials surprise markets by not acting.