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Turkish central bank raises policy interest rate to 50 pct

 Türkiye’s central bank has resumed its interest rate hikes, increasing the policy rate by 500 basis points to a substantial 50 percent, the bank said in a statement on Thursday.

The move comes as the bank aims to tackle the persistent inflation that has been higher than anticipated, particularly in the services sector, according to the statement.

The central bank has expressed its commitment to maintaining a tight monetary policy until there is a significant and sustained decline in the monthly inflation trend and inflation expectations align with the projected forecast range.

The bank’s Monetary Policy Committee (MPC) is keeping a close watch on inflation expectations, pricing behaviors, and the impact of wage increases on overall inflation, the bank said.

The high inflation rate, which peaked at 85 percent in October 2022 and remains above 60 percent, continues to place a significant burden on consumers. This economic pressure is compounded by the depreciation of the Turkish lira, which has eroded the incomes of workers and pensioners.

The latest official data indicates that Türkiye’s annual inflation rate rose to 67.07 percent in February, underscoring the ongoing economic challenges faced by the nation.

In February, the Turkish central bank paused its tightening cycle and kept the key interest rate unchanged at 45 percent after eight consecutive monthly increases.

Famagusta Gazette