Türkiye raises policy rate 500 points, above market consensus
The central bank of Türkiye made a surprising move on Thursday, raising interest rates higher than anticipated. This decision was part of the bank's ongoing efforts to combat rising inflation and stabilize the weakening lira. In fact, it marks the sixth month in a row that the bank has increased its policy rate by 5.0 percentage points as it continues to tighten fiscal policies.
- Economy
- Anadolu Agency
- Published Date: 03:15 | 23 November 2023
- Modified Date: 03:15 | 23 November 2023
The Central Bank of Türkiye on Thursday hiked its policy rate by 500 basis points to 40%, much more than market forecasts.
Economists polled by Anadolu survey last week expected the bank would deliver a 250 basis points rate hike.
The bank stressed that the current level of monetary tightness is significantly close to the level required to establish the disinflation course.
"Accordingly, the pace of monetary tightening will slow down and the tightening cycle will be completed in a short period of time," it said.
According to the latest data from TurkStat, Türkiye's annual inflation eased to 61.36% in October, from a nine-month high of 61.53% in September.
At its October meeting, the bank increased its policy interest rate, also known as the one-week repo auction rate, by 500 basis points to 35%.
Over the course of six monetary policy meetings, the bank has been gradually increasing the rate from 8.5% in May.