Interest rates on Turkey’s 10-year lira-denominated bonds rose to more than 23 percent on Monday, extending a record high, after the lira slumped to fresh record lows against major currencies.
Yields on the bonds rose to 23.13 percent during Monday morning trading after closing Friday at 22.87 percent.
Interest returns from investing in Turkish bonds have surged over the past three months even after the central bank cut its benchmark interest rate. The bank cut rates by 1 percentage point to 14 percent on Thursday, extending reductions to 5 percentage points since September.
The central bank’s interest rate reductions, ordered by President Recep Tayyip Erdoğan, have sparked a currency crisis and led to inflation of more than 20 percent. The lira has lost more than half of its value this year. It hit a fresh record low of 17.54 per dollar on Monday.
Interest rates on the 10-year bonds last hit record highs in August 2018, when the country had become embroiled in another currency crisis.