Turkish Lira, Bonds Fall as Minimum Wage Hike Fuels Inflation Fears.

The Turkish lira and government bonds have experienced a decline following a 49% increase in the minimum wage, which has raised concerns about inflation and the possibility of populist measures from President Recep Tayyip Erdogan ahead of elections. The minimum wage increase, which affects over a third of Turkey's workforce and serves as a reference for other pay agreements, was closely monitored by credit rating agencies and investors who are hoping for consistent economic policies. While recent interest rate hikes have attracted foreign investors, the lira has weakened and bond yields have risen, contrasting with the performance of other emerging markets. The upcoming local elections in March will be crucial in determining Turkey's economic policy and credibility. [Extracted from the article]