Assets fall as inflation puts Istanbul’s policy in the spotlight
THE Turkish lira fell and government bonds dropped amid concern that the country’s authorities were not doing enough to tackle runaway prices.
The currency slumped almost 2pc against the dollar and the yield on 10-year government bonds jumped more than 100 basis points after inflation accelerated to 24.5pc in September.
While the lira has shown signs of stabilising after the central bank raised interest rates to 24pc last month, helping government bonds rally, many analysts criticized policy makers for waiting too long to act. The knock-on effects of a more than 35pc depreciation in the lira this year are still feeding through into higher consumer prices, fuelling calls for even higher borrowing costs.