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Turkey declines to raise interest rates, sending lira on another tumble

Turkey's Central Bank has decided to keep interest rates where they are, surprising investors and dashing hopes that Turkish policies might evolve to meet the country's dismal economic reality.
Turkey's newly appointed Minister of Treasury and Finance Berat Albayrak swears in at the Grand National Assembly of Turkey (TBMM) in Ankara, Turkey on July 10, 2018. (Photo by ADEM ALTAN / AFP)        (Photo credit should read ADEM ALTAN/AFP/Getty Images)

Any illusions that Turkey’s new economy minister, Berat Albayrak, might inject reason into policy were shattered on July 24 when the country’s Central Bank decided to keep interest rates steady, plunging the country’s currency to further lows.

“The president has sacrificed Albayrak. No one will trust Turkey from here on,” tweeted veteran financial analyst Atilla Yesilada. The Turkish lira lost 3% against the dollar following the announcement. “It is clear that the [Central Bank] was instructed by Erdogan and his shadowy team of advisers not to touch the rates,” Yesilada’s PA Intelligence consultancy observed in a research note.

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