Turkish Central Bank Insists on Maintaining Interest Rates Despite Nearly 70% Inflation

Turkey’s central bank left the key interest rate unchanged at 14% at its meeting today. It has kept interest rates unchanged for the fifth month in a row, although inflation continues to rise.

The inflation rate in Turkey rose to 69.97% in April due to a jump in energy prices and a slump in the lira.

The central bank said it would continue to take measures to stabilize prices and the financial system. Inflation is expected to slow as the conflict between Russia and Ukraine eases.

Previously, the central bank began cutting interest rates in September 2021, steadily reducing rates by 5.00%.

However, the Turkish central bank’s interest rate cut has triggered the lira crisis, which has fallen by 44% in the past year. This made the lira the worst-performing currency in the emerging markets, as foreign investors lack confidence in the central bank’s independence.

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