Türkiye raises interest rate amid inflation risks

Türkiye’s central bank raised its benchmark interest rate by 350 basis points to 46 per cent on Thursday, tightening policy further in response to ongoing inflationary pressures and robust domestic demand.

The bank also lifted its overnight lending rate to 49 per cent and the overnight borrowing rate to 44.5 per cent, citing recent volatility in financial markets and sticky inflation expectations.

While inflation trends eased in March, the central bank said core goods inflation is expected to rise slightly in April and warned that inflation expectations and pricing behaviour continue to pose risks to the disinflation outlook.

“The tight monetary stance will be maintained until price stability is achieved via a sustained decline in inflation.” the Monetary Policy Committee said, adding that future rate decisions will be guided by both realised and expected inflation, as well as the underlying trend.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser