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Turkey’s Central Bank announced the biggest hike in interest rates in more than two years Thursday. President Recep Tayyip Erdogan, who has bitterly opposed raising rates, is scrambling to restore foreign investor confidence and contain the country’s deepening economic woes.
The rate hike offers hope that the sharp depreciation of the Turkish lira and the dollarization trend in Turkey could abate but also threatens economic contraction and fresh livelihood grievances for the populace, similar to the downturn in 2018, for which Erdogan’s Justice and Development Party (AKP) paid dearly in local elections in spring 2019.
