Economics
Turks Reap Billion-Dollar Bonanza From Erdogan's Rate Show
- Erdogan call for rate cut followed by biggest hike of his rule
- Lira, bonds, stocks rally after size of increase stuns market
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In a remarkable display of choreography, Turkish President Recep Tayyip Erdogan banned the use of dollars in most contracts, railed against high borrowing costs and then stood back as his central bank announced the biggest rate hike of his rule.
The end result of Thursday’s show was a rally in the ragged lira that cut the cost of dollars by more than 4 percent -- prompting Turkish bargain-hunters to snap up about $1 billion in an hour. That compares with an average of $400 million a week in net selling since the start of this year.