In Search of a Quick Win, Erdogan Gambles Turkey’s Economic Future

MIN READNov 23, 2021 | 20:37 GMT

People wait outside a currency exchange agency in Istanbul, Turkey, on Oct. 25, 2021.

(OZAN KOSE/AFP via Getty Images)

While the Turkish government’s unconventional financial policy could result in near-term growth, it could come at the cost of enduring economic instability and political uncertainty. On Nov. 18, the Central Bank of the Republic of Turkey (CBRT) cut its main policy interest rate by 100 basis points (bps) to 15%, marking the third consecutive monthly decrease and a cumulative cut of 400 bps since March. This underscores the government’s adherence to an experimental policy of monetary easing, despite accelerating inflation and the depreciating Turkish lira, which could plunge the country into a deeper currency crisis over the next year....