Turkish President Erdogan: Interest rates will fall significantly before the 2023 election

Joel Frank Independent Analyst

Turkish President Erdogan on Tuesday said that Turkish interest rates will fall significantly before the 2023 election and inflation will fall too, according to Reuters. Erdogan said earlier in the session that Turkey is pushing back the policy of high interest rates with the "back of its hand", before adding that recent volatility in the exchange rate is not based on economic fundamentals.

Moreover, he also said that there is no going back from the current economic model and that the economy will no longer live in the trap of inflation, high interest rates and the exchange rate. Those attacking the Turkish economy will not succeed, he added. Erdogan also said that he hoped Turkey would post a current account surplus in 2022 and that stability in the exchange rate can only be possible with exports and tourism income.

Market Reaction

It's been a volatile session for the ever beleaguered lira, with the pair up around 5.0% on the day just below 13.50, having briefly hit the half-round figure to match the record high printed last week. In wake of the latest inflammatory remarks from President Erdogan, who seems intent on worsening the CBRT credibility/currency crisis, a break above 13.50 seems likely.

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.