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Economists expect 500 basis point hike in Turkey’s interest rates next week: report

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Turkey’s central bank is expected to raise its key interest rate by 500 basis points to 35 percent next week, according to a report by the state-run Anadolu news agency, citing economists.

According to a survey of 19 economists by Anadolu, the central bank is expected to raise interest rates by 250 to 500 basis points at its monetary policy meeting on Oct. 26.

The economists’ forecast for the key interest rate at the end of the year was 40 percent.

Last month, the bank raised the rate by 500 basis points to 30 percent.

Turkish President Recep Tayyip Erdoğan performed one of his trademark policy reversals after winning the general election in May to secure another five-year term.

The election came during Turkey’s worst economic crisis in decades — one that analysts universally blamed on Erdoğan’s unorthodox conviction that high interest rates contribute to inflation.

Erdoğan previously called high rates “the mother and father of all evil” and spent years pushing the central bank to lower borrowing costs to speed up economic growth.

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