In Turkey, where severe inflation continues, the central bank has decided on the 21st to cut interest rates to lower major policy rates.
As a result, the currency lira has plummeted, raising concerns that rate cuts could spur higher prices.
The Bank of Turkey held a monetary policy meeting on the 21st and decided to reduce the main policy interest rate from 18% to 16% a year.
The rate cut is for the second consecutive month.
Turkey continues to experience severe inflation, with consumer prices rising close to 20%, while the lira has fallen about 20% this year, hitting both high prices and weak currencies.
For this reason, many people in the market thought that it was necessary to raise interest rates in order to get out of the predicament, but on the contrary, the currency lira plunged nearly 3% against the dollar at one point due to the decision to cut interest rates, so far. I got the lowest price.
It has been pointed out that Turkey's move is the result of the intervention of President Erdogan, who believes that rate cuts are widely welcomed by the public, as central banks in each country seek to shift to monetary tightening against the backdrop of rising inflationary concerns. I am.
As global energy prices such as oil and natural gas have cast a shadow over the Turkish economy, this rate cut will spur higher prices through higher import prices, further damaging people's lives and corporate activities. There is concern that it could become.