Turkish lira drops after Erdogan’s rate comments

The Turkish lira was the worst-performing emerging-market currency on Monday, depreciating 0.6 per cent against the dollar following President Recep Tayyip Erdogan’s comments on interest rates.

Erdogan stated that rates would “definitely fall next year,” sparking concerns about a return to unconventional monetary policies. The lira has lost 16 per cent of its value year-to-date, while MSCI’s EM currency index remained flat.

Economist Haluk Burumcekci warned that Erdogan’s remarks might undermine confidence in Türkiye’s central bank and complicate future rate decisions. Despite this, Turkish stocks edged higher as emerging-market equities saw broader declines, tracking Wall Street’s weaker performance.

In South Korea, the won slid as political uncertainty intensified following the impeachment of President Yoon Suk Yeol.

A Jeju Air crash that killed 179 people further pressured markets, with Jeju Air and AK Holdings shares plummeting 16 per cent and 12 per cent, respectively. Analysts at Citigroup expect prolonged instability as South Korea braces for a potential May presidential election.

Attribution: Bloomberg

Subediting: Y.Yasser