ANKARA: In a move to establish a disinflationary trajectory, Turkiye’s central bank raised its policy rate by 250 basis points to 42.5 percent on Thursday.
The monetary policy committee, noting that monetary tightness is now significantly close to the required level, announced a reduction in the pace of monetary tightening.
The committee emphasized its commitment to maintaining monetary tightness for as long as necessary to ensure sustained price stability.
This decision comes after Turkiye’s President Erdogan’s reelection in May, marking a shift towards more conventional economic policies by the new administration.
The central bank, under the leadership of Governor Hafize Gaye Erkan and Treasury and Finance Minister Mehmet Simsek, has actively increased interest rates from 8.5 percent to 40 percent between June and November to address persistent inflation.
Despite these measures, Turkiye continues to grapple with high inflation after a period of unconventional monetary policies in previous years.
