Investors are wary of the U-turns seen in Turkish monetary and fiscal policy in recent years, said Cristian Maggio, head of emerging markets at TD Securities in London. The central bank may raise interest rates further in a conventional response to inflation. But, “eventually, I believe President Erdogan will try to reset monetary policy” to be accommodative and pro-growth, even if this threatens long-term price stability, Maggio said. He predicted investors could notice a change in policy direction in the second half of 2021.

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