Despite threat-laden speeches and promises to avoid the interest-rate-trap, it appears Turkish President Erdogan has 'engineered' a monetary tightening of 150bps in the overnight lending rate (and is potentially on the path to another 150bps). Bloomberg reports that by shutting banks off from borrowing at the benchmark 17.75% repo rate and forcing them to turn to the overnight lending rate - currently at 19.25% - policy makers have effectively enacted a 150bps hike within a week. Should they close down the overnight market too, it would compel borrowers to turn to the emergency late liquidity window, where rates ... (full story)