Economists expect interest rates to remain elevated at least until the end of the first half of next year
Turkey’s central bank raised its key interest rate for the sixth month in a row today to 40%, the highest level since Recep Tayyip Erdogan has been in power.
The bank raised its interest rate by 5 basis points compared to last month and explained in its statement that the level of monetary tightening is “very close to the level required to chart a course towards deflation. Consequently, the pace of monetary tightening will slow down and the cycle of tightening will be completed within a short period of time.” “Monetary tightening will be maintained for as long as necessary to guarantee sustained price stability,” the central bank added.
After May’s election and President Erdogan’s re-election, the new group of central bank and finance ministry chiefs raised the key interest rate from 8.5% to 40% in a bid to reduce inflation, which last month reached 61.36%, according to official statistics. Economists expect interest rates to remain elevated at least until the end of the first half of next year.
