How Fed monetary policy hurts Turkey (and most Emerging Markets)


Governments across the world are battling the worst inflation wave since 1970s OPEC shocks. Led by US Central Bank Fed and European Central Bank, the preferred method of combatting inflation is to raise interest rates. This process is expected to last through 2023.


While Turkey and US are thousands of miles apart and have only a modest trade relationship, Fed rate hikes have a drastic effect on the Turkish economy. This observation applies to most Emerging Markets, which, too, shall suffer from higher US rates, bond yields and a stronger dollar.


But, why?  How does Fed monetary policy echo across the word all the way to Turkey?  Can Turkish economy, banks and currency survive the 2022-2023 monetary tightening episode without damage?  Real Turkey Channel presenter Atilla Yesilada explains from Istanbul…

Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.