Turkey’s central bank has raised its key interest rate by an aggressive 7.5 percentage points, in a new sign of a return to more traditional economic policies
Turkey’s central bank raised its key interest rate by an aggressive 7.5 percentage points on Thursday, in a new sign of a return to more traditional economic policies under President Recep Tayyip Erdogan.
The bank hiked its policy rate to 25% as it continued to backtrack from a rate-cutting course set by Erdogan, which has been blamed for inflaming a cost-of-living crisis. Many households have been left struggling to afford rent and basic goods.
Erdogan has long argued that lowering interest rates helps fight inflation, a theory that runs contrary to traditional economic thinking.
Central banks around the world have been hiking rates to bring consumer prices rises under control following the COVID-19 pandemic and Russia’s war in Ukraine.
