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Erdogan Got His Rate Cut and Now the Heat Is on Turkish Banks

  • Central bank cut rate by 100 basis points amid inflation surge
  • Spread between benchmark and commercial loan rates diverging
Turkish President Recep Tayyip Erdogan.

Turkish President Recep Tayyip Erdogan.

Photographer: Valeria Mongelli/Bloomberg

Two months after Turkish President Recep Tayyip Erdogan promised lower interest rates, the central bank delivered, despite raging inflation and a consensus among economists that it should be raising them instead. 

Next up: getting the country’s banks to cut their lending rates, too.