Turkey’s Central Bank raises interest rate by 750 basis points

The Central Bank raised its policy rate, the one-week repo auction interest rate, by 750 basis points to 25 percent. The market expectation was for a 250 basis point increase. In the Central Bank’s announcement, following was stated; “Indicators for the near term suggest that the rise in inflation’s core trend continues.”

Emphasizing the continuation of the interest rate hike, the statement highlighted, “The Committee will continue to make selective credit and quantitative tightening decisions that support the monetary tightening process.”

The MPC of the Central Bank of Turkey convened under the leadership of President Hafize Gaye Erkan. The Monetary Policy Committee (MPC) of the bank increased the policy rate, the one-week repo auction interest rate, by 750 basis points, raising it from 17.50 percent to 25 percent.

The market’s expectation for the interest rate increase was 250 basis points.