As the world uses the interest rate weapon against inflation, the CBRT passes on it

While the CBRT has kept its policy interest rate constant, which is below inflation, other central banks around the world have started to raise interest rates as a precaution against rising inflation.

The Central Bank of the Republic of Turkey (CBRT) has kept its policy interest rate steady at 14 percent despite inflation rising to a new peak of 20 years. While the CBRT continues its low interest rate policy, other central banks around the world have started to raise rates as a precaution against inflation, which is a global trend.

At today’s meeting of the Monetary Policy Board (PPC), the CBRT kept interest rates steady despite rising energy costs and inflation, which climbed to 61.14 percent in March, the new peak of 20 years.

CBRT REDUCED INTEREST RATE BY 500 BASIS POINTS TO 14 PERCENT IN 2021

At the end of last year, the CBRT had gradually reduced its policy interest rate by 500 basis points to 14 percent in line with the request of President Recep Tayyip Erdogan, who defended his view that interest causes inflation. While there have been no changes in interest rates this year, the real return of TL was minus 47 percent compared to current inflation due to current interest rates.