The Central Bank of Turkey sharply increased the rate from 8.5% to 15%

The Central bank of Turkey has taken drastic measures, raising the interest rate immediately from 8.5% to 15%. This was the first rate increase in the last 27 months and the first decision of the new leadership of the Turkish Central Bank. In the spring of 2021, the rate in Turkey increased to 19%, after which the regulator either kept it or reduced it.

Analysts predicted a rate increase of up to 40% after the change of the team in the economic block of the government, taking into account the level of inflation in the country. However, experts doubt that Erdogan will allow a prolonged increase in rates.

The central bank's message indicates that the management has decided to tighten monetary policy in order to contain inflation as soon as possible. Tightening will occur gradually as necessary until a significant improvement in the inflation forecast is achieved.

In October 2022, the price growth rate in Turkey reached a 24-year high of 85.5%, and in May 2023, inflation slowed to 39.59%. The lira has lost more than 80% of its value since 2018.