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Turkey hikes main interest rate to 17 percent to help bring down inflation

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Turkey’s central bank on Thursday raised its main interest rate by two percentage points to 17 percent and promised further monetary tightening to help tamp down the country’s soaring inflation, AFP reported.

The decision means that Turkey’s main rate has soared by 6.75 percentage points in just a month after two years in which it was held steady due to President Recep Tayyip Erdogğn’s belief that higher rates cause inflation.

The decision follows a November hike of 475 basis points. President Erdoğan had ousted the previous central bank governor in November after the lira dipped to record lows and appointed Naci Ağbal, a former finance minister, to the post. The former governor had reduced interest rates from their highs of 2018 in line with Erdoğan’s aversion to high rates.

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