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Surging Turkish Money Supply Revives Fear of Inflation Spurt

Turkish Economy As Gross Foreign Exchange Reserves Fall to $51.1 Billion
Photographer: Kerem Uzel/Bloomberg
Updated on

Turkish policy makers are pumping money into the economy at the fastest pace in over a decade to contain the fallout of the coronavirus pandemic, a move that risks weakening the currency and stoking inflation.

State lenders are unleashing credit through the economy as the central bank injects liquidity by scooping up government bonds. The money supply, as measured by the M1 gauge -- which includes currency in circulation and bank deposits -- is growing at an annual rate of almost 80%, according to the latest central bank data.