The new head of the central bank has changed course.
(Photo: Anadolu Agency/Getty Images)
Istanbul Turkey’s central bank has changed course in monetary policy under new leadership: the new head of the central bank, Hafize Gaye Erkan, announced on Thursday that monetary authorities would raise the key interest rate from 8.5 to 15 percent in the fight against high inflation and currency turbulence.
The Turkish monetary authorities also indicated that they would add more if necessary. “Monetary tightening will be tightened in a timely and gradual manner as necessary until a significant improvement in the inflation outlook is achieved,” the central bank said.
However, the increase was lower than expected: most analysts and major banks had expected an increase to 20 to 40 percent. Analysts in Turkey had assumed twelve to 30 percent.
Turkish lira is under pressure
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