The key rate remains at 17.0 percent
The Turkish central bank pressed the pause button after two interest rate hikes in a row at the beginning of the year. It left the key monetary policy rate at 17.0 percent on Thursday. Economists interviewed by Reuters had expected it. The Turkish lira fell after the dollar's decision. In the Corona year 2020 it has already lost around 20 percent of its value compared to the US currency.
The monetary authorities are confronted with rising inflation, which was around 14.5 percent at the end of 2020. They have now stated that they will remain true to their tough monetary policy course until a sustained decline in inflation becomes apparent. If necessary, there will be further streamlining steps.
The influential head of state Recep Tayyip Erdogan is actually seen as an opponent of higher interest rates, but under the impression of the fall of the national currency has openly shown himself to a tighter monetary policy and hoisted his confidante Naci Agbal into the chair of the central bank.
