May 11 2018

Lira falls after Erdogan calls interest rates ‘mother of all evil’ - FT

The downward trend in Turkish lira continued, after president Erdoğan’s comments on Friday calling the interest rates “the mother of all evil”, the Financial Times said.

Recep Tayyip Erdoğan said interest rates should go down after he held a meeting with his economic advisers and at a time the Turkish central bank is trying to ease the pressure on Turkish lira.

FT noted that Turkish lira is among the worst performing emerging market currencies this year and that the Turkey’s central bank had to raise interest rates to keep the Turkish economy afloat. Investors are also worried because of the overheating in the Turkish economy and the government’s policy to use expansionary fiscal policies ahead of the upcoming elections on June 24, according to the FT.