Turkey Raises Benchmark Interest Rate to 45%... 8th Consecutive Increase

Recep Tayyip Erdogan, President of Turkey.

The Central Bank of T?rkiye raised the benchmark interest rate by 2.5 percentage points from 42.5% to 45%.

According to AFP on the 25th (local time), the Central Bank of T?rkiye held a monetary policy committee meeting and raised the benchmark interest rate to 45%. This marked the end of a half-year-long tightening policy.

President Recep Tayyip Erdo?an, who succeeded in his re-election in last May's presidential election, abandoned the low-interest-rate policy and quickly raised the benchmark interest rate, which was at 8.5%. This is the highest interest rate during President Recep Tayyip Erdo?an's 21-year tenure.

The monetary policy committee analyzed that the intended policy effects are partially appearing after a total of eight consecutive rate hikes including this one. The committee explained, "Inflationary pressures continue due to domestic demand, price rigidity in services, and geopolitical risks," but added, "Considering the delayed effects of monetary tightening, we believe we have reached the necessary level of tightening at present." It further stated, "We will maintain the current policy rate until the monthly inflation rate significantly decreases and falls within the expected range."