Erdoğan will lose his battle with financial markets - report

Turkish President Recep Tayyip Erdoğan will lose his battle with financial markets, just as he did in 2014 when the central bank had to more than double interest rates to stem a flight of foreign capital..

Erdoğan revived his long-standing criticism of central bank policy this week, saying interest rates should be cut, rather than raised, to tackle inflation, which has accelerated into double digits. 

Bloomberg, citing Paul McNamara, a London-based fund manager at GAM U.K. Ltd., said in an analysis on Wednesday that Erdoğan would have to back down. 

“Nobody genuinely believes that high interest rates cause inflation; this is populist rhetoric from Erdoğan," McNamara said. “The lira is going to keep falling until we see tighter money.”

The financial markets are one of the few areas where Erdoğan has been unable to exert his will during his 15 years in power, Bloomberg said.