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Erdogan’s Bold Gamble: Turkey Shocks Markets, Switches to Hawkish Stance

Turkey's central bank is tightening monetary policy to curb inflation. It has ordered banks to place portions of their lira reserves in blocked accounts, increasing loan rates and reducing loan limits. Some banks have stopped lending or recalled loans, leading to a liquidity squeeze. The move comes despite the bank's previous indication that its rate-hiking cycle was over, but rising inflation and falling reserves have prompted a reassessment.