Turkey: Central bank resists Erdogan’s calls for rate cut

Lira rallies after central bank left its benchmark interest rate unchanged.

The Turkish lira rallied to lead gains among emerging-market peers after Turkey’s central bank held its benchmark interest rate, defying President Recep Tayyip Erdogan’s calls for a cut. The currency rose as much as 1.2% after the Monetary Policy Committee held its one-week repo rate at 19% for a fifth month as forecast by all 20 analysts surveyed by Bloomberg. The decision appeased traders who were concerned that the policy maker would succumb to political pressure and lower borrowing costs despite the deteriorating outlook for inflation. Consumer-price gains accelerated to 18.95% in July, virtually wiping out Turkey’s real policy rate.