Turkey's central bank raises interest rates to 25% in an effort to combat inflation, surpassing economist expectations and leading to a rally of the Turkish lira.
Turkey's central bank surprises markets by raising interest rates more quickly than anticipated.
Global interest rate hikes, challenges in China, a stronger dollar, and political instability in Africa have impacted emerging market assets, causing stock and currency declines and property market concerns in China, while Turkey's markets have seen a boost in response to interest rate hikes, and African debt markets have experienced a significant pullback.
Initial data and senior bankers suggest that Turkish depositors have mostly converted their funds back to dollars, withdrawing from state depreciation-protected accounts, as Ankara begins winding down the scheme to protect deposits from currency depreciation.
Wall Street banks are revising their outlooks for Turkish interest rates as inflation rises faster than expected, with JPMorgan, Morgan Stanley, and Bank of America suggesting that borrowing costs may need to rise higher or quicker in response to the surge in price growth.
The Federal Reserve is expected to announce a pause on interest rate hikes due to positive economic indicators and the likelihood of a "soft landing" for the economy, but future decisions will be influenced by factors such as the resumption of student loan payments and a potential government shutdown.
Turkey's central bank raises interest rates to 30% as it seeks to combat high inflation and stabilize the weakening lira.
The stock market showed a surprising reaction to the Fed's decision to keep interest rates unchanged, with expectations of a pause in rate hikes leading to selling in the market and a potential change in mood for investors.
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