Video OPINION: Turkish Central Bank rescues TL, sinks Erdogan

Last Thursday, in an wholly expected decision Central Bank  of Turkey raised its policy rate by 350 basis points, reversing course amidst a rate-cutting cycle previously expected to last through the year.  The decision was a reaction to large outflows of international financial capital and domestics suddenly seeking refugee in FX assets, when Erdogan ordered the arrest of the popular CHP mayor of Istanbul, Ekrem Imamoglu.

CHP still continues to protest the arrest by two rallies a week, which attract huge crowds. Since political shocks and global turmoil caused by the unpredictability of  the Whie House could last for months, Central Bank will not able to cut rates quickly. In this scenario, how damage will the Turkish economy suffer?  What are consequences for President Erdogan’s approvable ratings?