Turkey’s central bank continues rate hikes amid inflation concerns
2023.10.31 17:52
In an attempt to curb the rising inflation, the Central Bank of the Republic of Turkey (CBRT) has increased its one-week repo rate to 35.00% on Tuesday, marking a fifth consecutive rise since June 2023. This unprecedented cycle has resulted in a 2,650 basis point hike overall. The CBRT has identified inflation as a significant concern, driven by robust domestic demand, persistent services inflation, and growing inflation expectations.
Factors such as taxes, wages, and currency weakness have significantly impacted prices and continue to exert inflationary pressure. Geopolitical tensions like the Israel-Hamas conflict pose potential risks to inflation through oil price fluctuations. The CBRT is adopting a gradual approach to activate the disinflationary process swiftly and anchor inflation expectations. It maintains a hawkish stance with plans for additional monetary tightening aimed at achieving significant improvement in the inflation outlook. The Monetary Policy Committee is set to announce its next decision on November 23.
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