Turkey's central bank keeps interest rate at 8.5%, citing inflation

Al-Monitor Staff

Apr 27, 2023

A customer holds US dollar banknotes outside a currency changer on a street in Istanbul on September 6, 2022, as Turkey's economy is suffering its biggest economic crisis in decades ahead of one of the toughest elections of President Recep Tayyip Erdogan's rule. - Turkey's official inflation rate barely changed on September 5, in a sign that a year-long crisis that has seen prices soar by 80 percent may finally be starting to ease. The TUIK state statistics agency said that consumer prices rose by 80.2 perc — A customer holds US dollar banknotes outside a currency changer on a street in Istanbul on September 6, 2022, as Turkey's economy is suffering its biggest economic crisis in decades ahead of one of the toughest elections of President Recep Tayyip Erdogan's rule. — YASIN AKGUL/AFP via Getty Images

Turkey’s Central Bank decided on Thursday to leave interest rates unchanged. The decision comes ahead of Turkey’s elections next month and follows Turkish President Recep Tayyip Erdogan’s fiscal pledge.

The bank’s Monetary Policy Committee said it will keep its policy rate at 8.5%, citing continued inflation and the lasting effects of February’s devastating earthquake.

“The Committee assessed that the current monetary policy stance is adequate to support the necessary recovery in the aftermath of the earthquake by maintaining price stability and financial stability,” read a statement.

Why it matters: Inflation in Turkey has been on the rise for more than a year, though it may be easing somewhat. The most recent data indicates that annual inflation was 50.51% in March, down from 55.2% in February.