Economics
Turkey Unexpectedly Refrains From Rate Increase; Markets Tumble
- Analysts expected repo rate to rise point to 18.75 percent
- First rates meeting under new economy czar was under scrutiny
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Turkey’s central bank stunned investors by keeping interest rates unchanged, defying market expectations and heeding President Recep Tayyip Erdogan’s demands to refrain from raising borrowing costs. Stocks, bonds and the lira plunged.
In its first policy decision since Erdogan won re-election with sweeping new powers, the bank held its one-week repo rate at 17.75 percent, a full percentage point less than the median estimate of analysts in a Bloomberg survey.