Turkey's central bank has unexpectedly raised its key interest rate as the country continues to try and reign in soaring inflation.
The Central Bank of Turkey said on Thursday that it had raised the policy rate (or one-week repo auction rate) to 50%, up from 45%, due to higher-than-expected inflation in February. "While imports of consumption goods and gold slowed down and contributed to the improvement in the current account balance, other recent indicators imply that domestic demand remains resilient," the bank said in a press release. "Stickiness in services inflation, inflation expectations, geopolitical risks, and food prices keep inflation pressures alive." The bank said that the decision to start hiking interest rates again -following a brief pause last month which led market analysts to believe another hold was on the cards - came in response to a "deterioration in the inflation outlook". Indeed, inflation is still running rampant in Turkey: core consumer prices rose at a rate of 72.89% in February over the same month in 2023, while annual inflation was last recorded at nearly ...