Turkey's Currency Plunges After President Erdogan Pressures The Central Bank To Cut Interest Rates

A currency exchange office worker counts Turkish lira notes at an exchange office in Istanbul, on 6 August 2020 (AFP) 

Middle East Eye: Turkey's Central Bank stuns markets with strong rate cut amid soaring inflation 

Under President Erdogan's pressure, the bank decreased its policy rate by 200 points, exacerbating the country's ongoing currency crisis 

Turkey’s Central Bank shocked investors on Thursday by cutting its official interest rate by 200 basis points from 18 percent to 16 percent under pressure from President Recep Tayyip Erdogan. 

The bank’s announcement quickly dealt a blow to an already struggling Turkish lira, which posted another record-breaking loss, depreciating by more than two percent to 9.48 lira per US dollar. 

The bank, in a written statement, said that it believes soaring inflation, 19.58 percent last month, is driven by side factors such as food and import prices, especially in energy. 

The bank said that these were transitory factors because of post-Covid economic growth in the country.  

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Update #1: Lira Crashes To All Time Low After Turkey Shocks With 200bps Rate Cut Despite Soaring Inflation (Zero Hedge)  

Update #2: Turkey Central Bank Shock Has Strategists Eyeing Further Lira Drop (Bloomberg)  

WNU Editor: Elections have consequences. Everyone in Turkey knows who Erdogan is and what he would do, and he was overwhelming elected in the last election (link here).