The European parliament in Brussels voted overwhelming yesterday in favor of suspending the membership talks with Turkey, in response to Turkish President Tayipp Erdogan’s crackdown on opponents after the coup in July. Western leaders have accused Mr. Erdogan of using the coup as an argument to crack down any opponents and suppress freedom of speech. While the vote is a non-binding one and it is up to the countries to decide whether to move ahead with the talks or not, it nevertheless sends a strong signal to Turkey and Mr. Erdogan to that the EU is not ready to compromise on its core values for any future member.

Turkish central bank surprised the financial markets yesterday. Defying the political call to cut interest rates, Turkish central bank increased the benchmark one-week repo rate by 50 basis points to 8 percent and overnight lending rate by 25 basis points to 8.5 percent. Lira rose to 3.37 per dollar from 3.41 per dollar over the surprise rate cut but started reversing course as the EU voting news broke out. It is now trading at 3.45 per dollar, down more than 18 percent so far this year.