Turkey’s Rate Debacle Is a Warning for Emerging-Markets Investors

When central banks in the West behave chaotically, those in developing countries have even less room to mess around. Turkey doesn’t seem to have gotten the memo.

On Thursday, the Turkish lira fell 2% against the U.S. dollar after Turkey’s central bank lowered interest rates for a third time in a row. The lira has plummeted 30% since the start of the year, losing all the stability gained under the tenure of the previous central-bank governor, who was succeeded in March.