Turkish Central Bank Fixes Interest Rate for Fourth Time in Row

The Turkish Central Bank decided, Tuesday, to fix the interest rate at 50% for the fourth time in a row, in line with expectations.

The central bank had raised interest rates to 50% two months ago, with inflation rates rising to 75%.

Official data showed that year-on-year CPI in Turkey reached 75.45% in May, slightly above expectations. Data indicate that inflation has thus reached its peak before declining due to a series of interest rate hikes and the relative stability of the lira.

The consumer price index rose due to increases in education, housing and restaurant expenses last month.

According to the Turkish Statistical Institute, inflation is also expected to decline on a monthly basis after May, during which it reached 3.37%, compared to 3.18% in April, during which inflation on an annual basis reached 69.80%.

Bank of America expects the Turkish Central Bank to cut interest rates for the first time at the end of this year, while Morgan Stanley retreated from its expectations that the first cut in interest rates would be in Q1 of 2025.