FATF places Turkey on its gray list

As Turks wrestle with inflation, central bank cuts rates again. Turkey's central bank delivered a massive interest rate cut on Thursday, sending the lira to record lows, surprising analysts and compounding a long run of losses.

The Central Bank’s monetary committee cut the rate Thursday from 18% to 16%, despite rising inflation, The cut was seen by many as further evidence of the bank’s lack of independence from President Recep Tayyip Erdogan’s government.

It was another hit after a global financial watchdog placed Turkey on a list of countries to monitor for money laundering and terrorism financing.

Later Thursday, the Paris-based Financial Action Task Force, or FATF, placed Turkey on its “gray list” over its failure to make sufficient efforts to fight money laundering and terrorist financing.

Erdogan has long been pressing for lower borrowing rates to boost growth. Economists generally view higher interest rates as a curb on inflation, but the Turkish president has repeatedly argued that high interest rates cause prices to increase.