Turkish Policy Anomaly Persists With Rate Mechanism Still Broken

Turkish savers still get far higher interest on deposits than lenders charge for commercial credit, an anomaly that’s likely to persist with the central bank set to slow its already “gradual” monetary tightening.

The poor transmission of higher interest rates into the economy is an added challenge for a new team of policymakers installed by President Recep Tayyip Erdogan and now trying to undo years of unorthodoxy.