Turkey Rally Runs Out of Steam as Erdogan Sows Policy Doubts

Turkey Rally Runs Out of Steam as Erdogan Sows Policy Doubts By Selcuk Gokoluk and Netty Idayu Ismail January 18, 2021, 6:41 AM EST Updated on January 18, 2021, 9:59 AM EST Lira’s drop in past two days is most in emerging markets Turkish leader repeated controversial views on high rates The wheels are coming off the lira’s best start to a year since 2012 after President Recep Tayyip Erdogan rekindled doubts over the direction of Turkey’s monetary policy. The currency had appreciated more than 1% against the dollar this year -- adding to a 14% rally in the last two months of 2020 -- before Erdogan on Friday repeated his long-held belief that high interest rates fuel inflation. Since then, it has weakened almost 2%, the worst performance out of 24 major emerging-market currencies, and options traders have turned the most bearish on the currency since November. More:Turkey Rally Runs Out of Steam as Erdogan Sows Policy Doubts