- Turkey’s central bank on Thursday raised its key interest rate to 50% from 45%, citing the continued need to combat rising inflation in the country.
- Turkey’s annual consumer price inflation rate rose to 67% in February, raising concerns that Turkey’s central bank may have to return to tightening.
A photo taken on August 14, 2018 shows the Central Bank of Turkey logo at the entrance to the central bank’s headquarters in Ankara, Turkey.
Adem Altan | AFP | Getty Images
Turkey’s central bank on Thursday raised its key interest rate, the one-week repo rate, to 50% from 45%, citing the continued need to combat rising domestic inflation.
“The underlying trend of monthly inflation was higher than expected in February, driven by services inflation,” the central bank’s Monetary Policy Committee said in a statement after the decision. The report said that although imports of consumer goods and gold slowed and Turkey’s current account balance improved, domestic demand remained “resilient”.
“Services inflation, inflation expectations, geopolitical risks and food price persistence are maintaining inflationary pressures,” the statement said. “The Committee is closely monitoring the alignment of inflation expectations with expectations of pricing behavior and the impact of wage increases on inflation.”
Turkey’s annual consumer price inflation rose to 67% in February, unless Turkey’s central bank – which a month ago signaled an end to its painful eight-month rate hike cycle – returns to tightening. There were growing concerns that this might not happen.
This breaking news article is being updated.
