Turkey’s annual inflation rate jumped over 20 percent in November, official data showed Friday, after a currency crisis last month when the Turkish lira hit record lows against the dollar, Agence France-Presse reported.
Consumer prices climbed to 21.31 percent from the same period in November last year, up from 19.89 percent in October, according to the Turkish statistics office.
This is the highest figure in three years. Persistent inflation has decimated purchasing power.
Turkey’s official inflation target is five percent.
Ratings agency Fitch on Thursday revised its outlook on Turkey’s sovereign credit rating to negative, pointing to “a deterioration in domestic confidence”.
The lira lost nearly 30 percent in value in the last month against the dollar, and more than 45 percent since the start of the year.
The rise comes after a third consecutive interest rate cut in November as the central bank came under pressure from President Recep Tayyip Erdoğan, an enemy of high interest rates.
The Turkish leader has repeatedly called for lower interest rates to stimulate growth and production and boost exports.
Going against conventional economic thinking, Erdoğan claims high rates cause high inflation and reiterated his opposition this week to any hikes despite market jitters.
He has cast himself in a battle against an “interest rate lobby” seeking high rates, vowing to win the “economic war of independence.”
There are expectations the bank will cut the rate again on December 16.
Turkey recorded 7.4 percent year-on-year GDP growth in the third quarter, official figures showed Tuesday, with expectations of growth around nine percent in 2021.
Turkey last suffered a currency crisis in 2018 when the lira hit multiple record lows during a spat with then US president Donald Trump.
Since 2019 Erdogan has fired three bank governors and been through two finance ministers after his son-in-law Berat Albayrak resigned from the job in November 2020.
His replacement, Lütfi Elvan, resigned and was replaced late on Wednesday by his deputy Nureddin Nebati.
The main opposition party leader, Kemal Kılıçdaroğlu, questioned the official data and tweeted that he had sought a meeting with the Turkish statistics office but was refused.