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Thursday, January 20, 2022

Turkish stock market halts trading twice amid rampant inflation

Istanbul-based Borsa Bourse halted trading as the lira fell to a new low after years of Turkey’s policy of promoting low interest rates.

The Turkish stock market was closed twice on Friday after a devastating collapse as the country faces rising inflation and a volatile economy.

The Istanbul Stock Exchange (Borsa) on Friday halted trading in stocks, derivatives and debt repos twice on Friday as the country’s economic crisis reached a new level of alarm. The first occurred on Friday afternoon, after the stock market plunged as much as 7 percent. At 5:24 pm local time, trading resumed but was halted again when the Borsa Istanbul 100 fell 9.1 percent in just two minutes.

The immediate catalyst for the collapse was intervention by Turkey’s central bank, which failed to ease inflationary pressures on the lira. The intervention follows another rate cut ordered by Turkish President Recep Tayyip Erdogan, who has pushed for low interest rates despite years of accelerating inflation.

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The lira fell more than 50 percent against the US dollar in 2021, with most of this depreciation occurring in the past month alone. Experts have warned of an impending economic crisis for years, but Erdogan has been persistent in his approach to growth, which has been characterized by ideas about the economy that have been described as “unorthodox.” In 2018, the Turkish president spoke out in poetry about the central bank, stating that “interest rates are the mother and father of all evil.”

Borsa is expected to reopen on Monday after a busy weekend for investors. However, combined with the pressures of inflation and economic stagnation, Turkish leaders will face a challenge on an unprecedented scale in the country’s recent economic history – the culmination of decades of debt and inflation that has now escalated to alarming degrees.

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World Nation News Deskhttps://www.worldnationnews.com
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