Turkey central bank hikes rate sharply
The Central Bank of Turkey raised its policy rate by a substantial 500 basis points to 40% on Thursday, surpassing market expectations.
This increase, announced during the bank's sixth consecutive policy meeting, indicates an imminent end to the current cycle of monetary tightening.
Economists surveyed by the Anadolu Agency had predicted a more modest increase of 250 basis points. The bank has emphasized that the present level of monetary firmness is nearing the necessary threshold to initiate a disinflationary trend. It anticipates that the pace of monetary tightening will decelerate, concluding this cycle shortly.
October's data from TurkStat revealed that Turkey's annual inflation rate decreased slightly to 61.36%, down from a nine-month peak of 61.53% in September. In its October meeting, the Central Bank had previously upped the policy interest rate, also known as the one-week repo auction rate, by 500 basis points, bringing it to 35%.
Since May, when the rate was just 8.5%, the bank has incrementally increased it over six policy meetings, reflecting a significant shift in its monetary policy stance.
