President Recep Tayyip Erdogan had called for the key interest rate to be lowered into the single digits by the end of the year.
(Photo: dpa)
Istanbul The high level of inflation in Turkey weakened in November for the first time in around a year and a half. Goods and services rose by an average of 84.39 percent compared to the same month last year, as the statistics office announced on Monday. In October, the inflation rate was still 85.51 percent.
The number one price driver remained the transport costs, which include fuels such as petrol. They increased by 107 percent. Grocery and non-alcoholic beverages rose more than 102 percent. Consumers also had to dig deeper into their pockets for furniture and household appliances: they cost an average of 92.83 percent more than in November 2021.
The main reason for the sharp rise in prices is the consequences of the Russian war against Ukraine, which has made many raw materials significantly more expensive. However, rising inflation is also closely linked to the weakening lira: the national currency lost 44 percent of its value against the dollar last year, and this year the loss is around 30 percent.
According to economists, one reason for this is the monetary policy of the Turkish central bank. Despite the high inflation, the latter lowered its key interest rate in November into the single digits for the first time in more than two years: it was reduced to 9.0 from 10.5 percent.
Top jobs of the day
Find the best jobs now and
be notified by email.
President Recep Tayyip Erdogan had previously called for the level to drop to single digits by the end of the year. The central bank began easing its monetary policy more than a year ago. At that time, the interest rate was still 19 percent.
This course makes economists shake their heads. The vast majority of experts recommend combating high inflation with higher interest rates, as the US Federal Reserve and the European Central Bank (ECB) are trying to do. Argentina, where the inflation rate is also more than 80 percent, has now set the key interest rate at 75 percent.
More: Kitchen appliances for food: High inflation forces Argentines to barter