Turkish central bank faces key test on economic turnaround after Erdogan’s reelection

By SUZAN FRASER and AYSE WIETING
Associated Press

ANKARA, Turkey (AP) — Turkey’s central bank faces a key test on turning to more conventional economic policies to counter sky-high inflation after President Recep Tayyip Erdogan’s recent reelection. On Thursday, the bank is holding its first interest rate-setting meeting since the longtime leader named internationally respected officials to head the bank and the finance ministry. While a sharp rate hike is expected, it’s not clear if it will be enough to ease market concerns. The appointments have been seen as a sign that Turkey would abandon Erdogan’s unorthodox belief that lowering interest rates combats inflation. Traditional economy theory says just the opposite. Erdogan has said he would “accept” his new finance minister’s policies — but also insisted his views haven’t changed.