diff --git a/lisp/tramp.el b/lisp/tramp.el
index 7e68b639..4c057703 100644
--- a/lisp/tramp.el
+++ b/lisp/tramp.el
@@ -4868,7 +4868,8 @@ verbosity of 6."
   "Read a password from user (compat function).
 Consults the auth-source package.
 Invokes `password-read' if available, `read-passwd' else."
-  (let* ((case-fold-search t)
+  (let* ((default-directory (tramp-compat-temporary-file-directory))
+	 (case-fold-search t)
 	 (key (tramp-make-tramp-file-name
 	       ;; In tramp-sh.el, we must use "password-vector" due to
 	       ;; multi-hop.