Turkey’s lira plunges more on fears over Recep Tayyip Erdogan’s monetary policy
Istanbul — The Turkish lira tumbled more than 5% on Wednesday before recovering some ground, the latest drop in a sell-off that reflects growing investor alarm over the direction of monetary policy under President Recep Tayyip Erdogan. The decline, exacerbated by stop-loss selling by Japanese retail investors overnight, brings the lira’s losses to more than 20% so far in 2018 and puts it on track for its worst monthly performance since the 2008 financial crisis. The sell-off has also increased expectations that the central bank may be forced to call an extraordinary meeting to raise interest rates before its next scheduled policy-setting meeting on June 7, as it has done in previous years. "We expect the MPC [monetary policy committee] to hold an interim meeting over the coming days to raise interest rates by at least 200 basis points," Jason Tuvey of Capital Economics said in a note to clients. "If policy makers refrain from tightening monetary policy, the risk of a disorderly adju...
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