Turkish President Recep Tayyip Erdogan’s demand for interest-rate cuts sent a brief shockwave through the lira, with the currency hitting a new all-time low.
But among traders and analysts, the reaction was: we’ve all seen this before. After Erdogan fired his previous central bank governor in March, it was only a matter of time before he started bearing down on a path to lower rates.
“The Turkish story is well known and has been ongoing for a while now, so I get the sense that investors would not have been caught off-guard,” said Todd Schubert, head of fixed-income research at Bank of Singapore Ltd. “There is little risk of heavy foreign fund outflows.”
(Bloomberg) The Turkish currency sank to a record low, weighed down by rising U.S. yields and concern that monetary policy remains too loose to contain accelerating inflation.
The lira slid as much as 1.1% to 8.
New York: Investors are about to get a snapshot of any price pressures building across the developing world the fallout of the unprecedented stimulus that’s been unleashed to revive the global economy.
Heavyweights including Brazil, China and India will report inflation data this week against a backdrop of quickening growth that’s being fueled by months of easy money and fiscal largess.
Citigroup Inc’s inflation-surprise index for emerging markets spiked last month to its highest since 2008, a sign that investors may be underestimating the scale of the resurgence.
Long the scourge of debt holders and a threat to currency stability, accelerating inflation has already forced policy makers in Brazil and Russia to raise borrowing costs. The Czech central bank last week signaled it could follow suit in mid-year, while Turkey’s monetary authority has pledged to keep rates elevated until there is a significant slowdown in price gains.
Investors are about to get a snapshot of any price pressures building across the developing world the fallout of the unprecedented stimulus that’s been unleashed to revive the global economy. Heavyweights including Brazil, China and India will report inflation data this week against a backdrop of quickening growth that’s being fueled by months of easy money and fiscal largess. Citigroup Inc.’s inflation-surprise index for emerging markets spiked last month to its highest since 2008, a sign that investors may be underestimating the scale of the resurgence. Long the scourge of debt holders and a threat to currency stability, accelerating inflation has already forced policy makers in Brazil and Russia to raise borrowing costs. The Czech central bank last week signaled it could follow suit in mid-year, while Turkey’s monetary authority has pledged to keep rates elevated until there is a significant slowdown in price gains.
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With Pimco standing firm. 08:26
Image: Bloomberg
Investors are about to get a snapshot of any price pressures building across the developing world the fallout of the unprecedented stimulus thatâs been unleashed to revive the global economy.
Heavyweights including Brazil, China and India will report inflation data this week against a backdrop of quickening growth thatâs being fueled by months of easy money and fiscal largess. Citigroup Inc.âs inflation-surprise index for emerging markets spiked last month to its highest since 2008, a sign that investors may be underestimating the scale of the resurgence.
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