Turkish Central Bank Hikes Rates by 250 Basis-point to 45%

The Turkish Central Bank continued to raise the interest rate in its first meeting of 2024 by 250 basis points, and the Turkish Central Bank decided, Thursday, to raise the interest rate to 45%, which is consistent with expectations.

According to the statement issued by the bank, Turkey's core inflation rate rose in December in line with expectations presented in the latest inflation report.

On the other hand, recent estimates indicate that domestic demand continues to moderate in line with the expected inflation slowdown.

The bank said after the monthly meeting of the Monetary Policy Committee: “The monetary tightening required to determine the path of inflation deceleration has been achieved ... and this level will be maintained as long as it is needed.”

Turkey's annual inflation rate accelerated to 64.8% in December 2023, the highest level since November 2022, compared to 62% in the previous month.

The Turkish Central Bank indicated that the current level of the interest rate will be maintained until there is a significant slowdown in the underlying trend of monthly inflation.