Turkey's central bank raises key rate by 40 per cent
Economy
Turkey's central bank has once again raised its key interest rate as part of a crackdown on the country's rising inflation.
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The central bank raised rates from 35 per cent to 40 per cent, suggesting that rates are approaching the level needed to start reducing inflation.
The country's inflation rate reached 61.36 per cent in October. It is forecast to rise further, with the highest rate projected to reach 70-75 per cent in May next year.
While central banks around the world have been raising interest rates in an attempt to slow price rises, President Recep Tayyip Erdogan has argued that higher rates would lead to higher prices. However, since his re-election in May, the president's stance has changed and the central bank has been authorised to increase interest rates in an attempt to slow price rises.
"The pace of monetary tightening will slow down and the tightening cycle will be completed in a short period of time," the Central Bank's press office said.
It said rates will remain at high levels "as long as needed to ensure sustained price stability".
The country's inflation rate reached 61.36 per cent in October. It is forecast to rise further, with the highest rate projected to reach 70-75 per cent in May next year.
While central banks around the world have been raising interest rates in an attempt to slow price rises, President Recep Tayyip Erdogan has argued that higher rates would lead to higher prices. However, since his re-election in May, the president's stance has changed and the central bank has been authorised to increase interest rates in an attempt to slow price rises.
"The pace of monetary tightening will slow down and the tightening cycle will be completed in a short period of time," the Central Bank's press office said.
It said rates will remain at high levels "as long as needed to ensure sustained price stability".
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