The Turkish Central Bank announced on Thursday that it raised the interest rate by 500 basis points to 30 percent on repo operations for a week.
This came during a meeting of the Central Bank’s Monetary Policy Committee, headed by the Bank’s Governor, Hafiza Ghaya Arkan, on Thursday.
The Turkish Central Bank confirmed in a statement that “the increase in local and international demand for Turkish lira assets will contribute significantly to price stability.”
It pointed out that tax regulations “have a significant impact on inflation rates due to cost-oriented pressures resulting from wages and exchange rates.”
The statement stressed that “foreign direct investments, improving external financing conditions, the continued increase in foreign reserves, and supporting tourism revenues for the current account will contribute to enhancing price stability.”
It pointed out that “the strong trend in domestic demand and the rise in oil prices is creating additional upward pressures on inflation.”
It stressed that the Monetary Policy Committee “decided to continue the process of monetary tightening in order to control inflation and the deterioration in pricing behavior.”
It also stated that the committee “will continue to make credit and quantitative tightening decisions in addition to increasing interest rates.”
It stressed that the committee will continue to make its decisions within a “transparent and predictable” framework and use all available tools in line with the main goal of “price stability.”