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Borrowing costs soar in Turkey, behind President Erdogan’s rate cut-Bloomberg

Borrowing costs are skyrocketing in Turkey. President Erdogan’s efforts to cut interest rates have begun to backfire.

Yields on 10-year Turkish government bonds have risen by more than 7 points since the Bank of Turkey began cutting interest rates in September, reaching a record high of 24.9% on the 29th. It exceeded the policy interest rate of one week repo by more than 10 points, and the amount of addition was the largest ever.

Turkey 10-Year Bond Yield and Policy Rate Spread

Source: Bloomberg

Investors are worried that monetary policy is too easing to curb inflation, which has been near its highest in the last decade, against the backdrop of soaring government bond yields. President Erdogan last weekAlthough it supported the lira market by announcing unusual measures, it had little effect on curbing the rise in government bond yields.

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