On Thursday, the Central Bank of Turkey announced an increase in the interest rate by 650 basis points to 15 percent on “repo” repurchases for a week.
The Turkish Central Bank said in a statement that it “will support the monetary tightening policy gradually when necessary and to the extent necessary until a significant improvement in inflation expectations.”
It added that the Monetary Committee of the Central Bank decided to start the policy of monetary tightening, pointing to raising the interest rate from 8.5 to 15 percent.
Central banks around the world use interest rates to reset consumer prices in their domestic markets by controlling the amount of the interest rate on loans and deposits.
Turkey succeeded in reducing high consumer prices, which exceeded 85 percent to 39.59 percent, amid expectations that the downward path will continue for the coming months.
Earlier this month, President Recep Tayyip Erdogan said, “We will take decisive steps to combat inflation and intensify our efforts to protect large segments of our people from the effects of inflation.”