Investing.com — The Turkish lira ranked as the worst performer among emerging market currencies on Monday. This is in response to President Recep Tayyip Erdogan’s recent comments on interest rates, which have raised concerns about a possible return to his unconventional monetary policies of the past.
The lira fell 0.6% against the dollar, resulting in a depreciation of around 16% since the beginning of the year. By comparison, MSCI’s EM currency index was largely unchanged on Monday and is only slightly in the red for 2024.
President Erdogan made a statement indicating that interest rates would definitely fall next year. He added that “2025 will be the peak year for this.” This comment followed the Turkish central bank’s first interest rate cut since 2023.
Despite warnings from officials against a continued easing cycle, analysts are now predicting rate cuts at every policy meeting in 2025.
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