Turkiye hikes interest rates to curb inflation

Ankara: The Central Bank of Turkiye has increased interest rates after a long time to control the increasing inflation in the country.

According to details, the central bank of Turkiye has almost doubled interest rates from 8.5 percent to 15 percent to curb inflation and improve the value of the currency.

Recently re-elected President Recep Tayyip Erdogan's new economic team took a dramatic U-turn on monetary policy.

The central bank of Turkiye said: “The policy will be gradually tightened until the rate of inflation decreases”.

Interest rates in Turkiye were last hiked in March 2021 and have been continuously reduced since then. It was 19 percent in 2021, which was gradually reduced to 8.5 percent in March 2023, but the inflation rate also increased.

Turkiye's inflation rate was close to 40% in May, while the Turkish currency Lira had been depreciating against the dollar for a long time.

The currency has depreciated by 80% against the dollar over the past five years.

Central Bank Governor Hafize Gaye Erkan added: “The committee decided to initiate a policy tightening process to control inflation”.