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Erdogan’s Push for Low Rates Backfires as Borrowing Costs Soar
The cost of borrowing money in Turkey is surging, a sign that President Recep Tayyip Erdogan’s policy of driving down interest rates is starting to backfire. Since the central bank began slashing rates in September, the yield on 10-year government bonds has climbed more than 7 percentage points, touching a record high of 24.9% on Wednesday. The increase comes as investors worry monetary policy will remain far too loose to contain inflation that is nearing the highest in a decade and eroding the value of their local-currency holdings. Some bank loan rates, meanwhile, have jumped to as high as 35%, Dunya newspaper ... (full story)