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Aside from the politics I agree raising rates would be good for foreign debt holders and bad to Turkey internally. Lower rates keeps exports high and jobs rema
by wolco 7y ago
Aside from the politics I agree raising rates would be good for foreign debt holders and bad to Turkey internally. Lower rates keeps exports high and jobs remain when employment is full start raising rates.
- MiroF 7y agoThe lira is inflating out of control and you think high rates are bad for Turkey internally... sigh
- hogFeast 7y agoWut? If you raise rates, then the price of bonds falls...if you hold debt, you want lower rates because you can then sell your bond at a higher price (theoretically, these are foreign-currency bonds so it isn't quite that simple). And Turkey needs higher rates. The rate has been far below the natural rate for way too long. In capital markets, you saw Turkish companies make all these crazy acquisitions (in addition, to being forced by the govt into splashy infrastructure projects in areas that supported the govt)...the bust from this will be incredible (the only leverage Turkey has is that French/German banks are neck deep in this debt). Lowering rates is just prolonging the inevitable (the majority of Turkey's corporate sector is already functionally insolvent).