, Columnist
Turkey’s New Banker Delivers Radical Medicine. He Had Little Choice
Central bank Governor Naci Agbal has opened his account with a big hike and impressive language. He must follow through.
Grace period.
Source: Bloomberg
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In the annals of central banking, Turkey’s 475 basis-point hike in interest rates has the makings of a classic.
That Thursday’s move from new governor Naci Agbal matched economists’ forecasts does nothing to detract from its significance. Agbal’s opening shot ends, at least temporarily, a long sabbatical for the monetary authority, characterized by soaring inflation and a cratering currency. Policy makers have also been hamstrung by a convoluted rate structure and President Recep Tayyip Erdogan’s insistence that high interest rates cause, rather than quash, inflation.