Tough lessons from Turkiye

THE Turkyish economy, which is among the world’s top 20 with a US$1.1 trillion gross domestic product, is one of the most affected by the Covid-19 pandemic. While inflation was high, the government used an unorthodox method to keep local interest rates at a relatively low level in order to contain inflation rates.

The pandemic and Russia’s invasion of Ukraine caused inflation to soar worldwide. While almost every central bank raised interest rates in response, Turkiye went on an interest rate-cutting spree.