NATO state raises interest rates to 40% – Analysis

The Turkish central bank unexpectedly raised its key interest rate to 40% in an effort to combat soaring inflation. Economists had predicted a rise of 250 basis points, but the actual increase of 500 basis points demonstrates the bank’s determination to tackle the issue. Inflation in Turkey reached 61% in October. Timothy Ash, an emerging markets strategist at BlueBay Asset Management, praised the move and acknowledged the central bank’s commitment to fighting inflation. Under the leadership of Hafize Gaye Erkan, the central bank has steadily increased interest rates from 8.5% to the current 40% to slow down price increases. The bank stated that it intends to maintain high interest rates until sustained price stability is achieved, signaling a short duration for the tightening cycle. Despite the painful impact on the Turkish population, the decision aims to reverse years of skyrocketing inflation and a weakened currency caused by loose monetary policies. The Turkish lira has lost over 80% of its value compared to the US dollar in the last five years.

Source: RT news: NATO state raises interest rates to 40%