ISTANBUL (Reuters) – Turkey’s central bank raised its policy rate by 500 basis points to 35% on Thursday, as expected, tightening aggressively for a third straight month as it steps up efforts to rein in inflation that has soared for years.
In a Reuters poll, most economists predicted a 500 basis-point hike, while four forecast a 250-point hike and one 300. The one-week repo rate has risen by 2,650 basis points since June.
The bank’s policy committee reiterated that it is ready to raise rates further as needed to curb inflation, which climbed to an annual rate of 61.53% in September and is expected to rise into next year.
President Tayyip Erdogan chose former Wall Street banker Hafize Gaye Erkan as central bank chief after his May re-election. She led a policy U-turn to relieve an economy strained by depleted FX reserves and surging inflation expectations.
Erdogan’s previous support for low interest rates despite surging prices brought on a currency crisis in late 2021 and pushed inflation above 85% last year. Inflation is seen ending this year at 68%.
(Reporting by Can Sezer and Ece Toksabay; Writing by Daren Butler; Editing by Jonathan Spicer)
