Turkey’s central bank on Thursday cut interest rates by 150 basis points to 9% and decided to end its cycle of monetary policy easing, citing increased inflation risks.
The Central Bank of the Republic of Turkey (CBRT) has been under pressure from President Recep Tayyip Erdogan to continue cutting rates despite surging inflation, which skyrocketed 85.5% year-on-year in October as food and energy continued to reach exorbitant prices.
“Considering the increasing risks regarding global demand, the Committee evaluated that the current policy rate is adequate and decided to end the rate cut cycle that started in August,” the central bank said in a statement.
Erdogan has continued to insist that hiking interest rates, in line with central banks worldwide, would wreak havoc on the Turkish economy.
“While the negative consequences of supply constraints in some sectors, particularly basic food, have been alleviated by the strategic solutions facilitated by Türkiye, the upward trend in producer and consumer prices continues on an international scale,” the central bank said.
