Turkish President Erdogan mentioned that the country did not need to hike interest rates. These remarks have no implications for the lira, in the view of economists at Commerzbank.

Erdogan reiterates case against rate hikes

“President Tayyip Erdogan’s repetition that there is no case for rate hikes in Turkey hardly has implications for the exchange rate. Even if his remarks might mean that CBT will be under pressure to cut the rate again in the coming months, that too, should come as no surprise.”

“Erdogan is emphasising rapid investment as the way to tackle inflation. This is anyway a longer-term strategy. But crucially, Turkey needs substantial foreign capital to bridge the gap between the required investment rate and Turkey’s own low savings rate. But perhaps that too will be clear only over the longer-term. For now, we see no implication for the lira.”