Residents wait at a bus stop under a large Turkish flag in Istanbul, Turkey, on Sunday, April 30, 2023.
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The Turkish central bank raised its key interest rate by another 250 basis points to 45% on Thursday.
The increase to the one-week repo rate was in line with economists' expectations.
It comes amid an ongoing battle against double-digit inflation for Turkish monetary policymakers, with the rate hike the latest step in that effort.
Turkey's inflation rate rose to 64.8% year-on-year in December, up from 62% in November, and the country's currency, the lira, hit a new record low against the US dollar earlier in January, breaking the 30-point mark against the dollar for the US dollar. first time.
Analysts predict this will be the last increase in a while, especially as local elections approach in March.
The central bank's decision is the latest in a series of rate hikes – now eight consecutive hikes since the May 2023 elections – that have been painful for Turks as the country struggles with a dramatically weakened currency and skyrocketing costs of living.
Recent years of high inflation are in large part the result of the Ankara government's stubbornly accommodative monetary policy.
The lira is down 38% against the dollar year to date and has lost more than 80% of its value against the dollar in the past five years.