Lira's Slide Continues

Turkish President Recep Tayyip Erdogan’s economic team has taken its first steps toward unwinding policies that caused inflation to soar and investors to exit the country en masse.

For now, it’s a gradual approach. The central bank, under new Governor Hafize Gaye Erkan, hiked interest rates by 650 basis points last week. While it was the first raise in more than two years, it was smaller than traders hoped for, causing the lira to weaken and Turkish bonds to drop. At 15%, the base rate remains well below inflation running at almost 40%.