Turkish central bank move raises questions over independence
Jul. 24, 2018
ISTANBUL (AP) — Turkey's central bank, in a closely monitored move, has not increased its main interest rate, raising questions over its independence.
The central bank said Tuesday that it decided to keep its one-week repo rate at 17.75 percent, despite expectations of at least a 1 percentage-point increase.
That triggered a sharp drop in the Turkish currency, the lira, in financial markets. The currency has lost more than a fifth of its value against the dollar since the beginning of the year.
President Recep Tayyip Erdogan has opposed high interest rates to boost growth. But higher rates would help to contain inflation and support the currency. A weaker lira makes it harder for companies to service debt held in foreign currencies.
Erdogan got sweeping new powers after a general election last month.