2023-09-24 13:00:58
He Central Bank of Türkiye has decided to raise the reference rate from 25% to 30%, its highest level since September 2003.
“The Committee decided to continue the monetary adjustment process in order to materialize a disinflationary course as soon as possible, anchor inflation expectations and control the deterioration of price behavior,” the entity explained.
Thus, the Turkish central bank has assured that it will determine the level of the reference interest rate in a way that creates the necessary monetary and financial conditions to ensure a decrease in the underlying inflation trend and achieve the 5% inflation target. in the medium term.
To this end, it has warned that monetary adjustment “will be reinforced as much as necessary”, in a “timely and gradual” manner, until a “considerable improvement” in the inflation outlook is achieved.
Last August, Turkey’s annual inflation rate stood at 58.94%, compared to 47.83% in July, therefore continuing the upward trend that began in the seventh month of the year after a streak of eight consecutive declines in the price index.
For its part, the underlying variable, which excludes food, energy, non-alcoholic and alcoholic beverages, tobacco and gold from its calculation due to the volatility of their prices, stood at 64.85%.
Since Hafize Gaye Erkan took over as governor of the Central Bank of Turkey last June, the institution has undertaken a radical turn towards orthodoxy in its monetary policy with four consecutive rate increases, which have increased the amount of money by 2,150 basis points, from 8.50% before the appointment to the current 30%.
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