Turkey's central bank keeps rate steady amid high inflation
Turkey’s central bank has kept its main interest rate unchanged for a fourth month running even as surging inflation has hit a 20-year high and eroded people’s purchasing power
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Turkey’s central bank on Thursday kept its main interest rate unchanged for a fourth month even as surging inflation has hit a 20-year high and eroded people's purchasing power.
In a statement following a monetary policy committee meeting, the bank said it was keeping its policy rate “constant” at 14%.
The decision was in line with President Recep Tayyip Erdogan’s opposition to high borrowing costs in a bid to boost growth, investment and exports. The Turkish leader insists that raising interest rates cause inflation — a position that contradicts established economic thinking.
Turkey’s central bank has cut rates by 5 percentage points since September despite high inflation, then has paused them since January. The series of rate cuts last year triggered a currency crisis and rising consumer prices that have been aggravated by Russia’s invasion of Ukraine and soaring energy costs.
Yearly inflation hit 61.14% in March, deepening the squeeze on households that were already struggling to purchase basic goods. The Turkish lira lost 44% of its value against the U.S. dollar last year.
In an effort to soften the blow on households, the government has implemented tax cuts on basic goods and has adjusted electricity tariffs.
In comparison, the United States, United Kingdom and the 19 countries that use the euro currency have seen decades-high levels of inflation — 8.5%, 7% and 7.5%, respectively — but are nowhere close to Turkey's eye-watering rate. Central banks in the U.S. and U.K. have raised interest rates to combat inflation.