Current:Home > FinanceTurkey’s central bank hikes key interest rate again to 45% to battle inflation -WealthX
Turkey’s central bank hikes key interest rate again to 45% to battle inflation
View
Date:2025-04-15 03:55:23
ANKARA, Turkey (AP) — Turkey’s central bank raised its key interest rate by another 2.5 percentage points on Thursday, pressing ahead with a series of hikes aimed at combating inflation that reached nearly 65% in December.
The bank brought its benchmark rate to 45%. It’s the eighth interest rate hike since President Recep Tayyip Erdogan has abandoned his unconventional economic policies that economists say helped trigger a currency crisis and drove up the cost of living. Many households were left struggling to afford basic goods.
Erdogan is a longtime proponent of an unorthodox policy of cutting interest rates to fight inflation, which runs contrary to mainstream economic thinking.
In contrast, central banks around the world raised interest rates rapidly to target spikes in consumer prices tied to the rebound from the COVID-19 pandemic and then Russia’s war in Ukraine.
The European Central Bank is expected to keep its record-high benchmark rate steady at its meeting Thursday, following a rapid series of hikes over more than a year.
Turkey’s leader reversed course on his economic policies after winning a third term in office in May. Erdogan appointed a new economic team headed by former Merrill Lynch banker Mehmet Simsek, who returned as finance minister.
Hafize Gaye Erkan, a former U.S.-based bank executive, took over as central bank governor in June, becoming the first woman to hold that position in Turkey. Under her tenure, borrowing costs have increased from 8.5% to the current 45%.
Previously, Erdogan had fired central governments who reportedly resisted his push to cut interest rates.
Last week, Erkan denied allegations by a Turkish newspaper claiming that her father was exerting influence over the bank and had fired a bank employee. The allegations had led to speculation about Erkan’s possible removal from office.
Erdogan, however, came out in support of the central bank governor this week, dismissing the report as “irrational rumors designed to destroy the climate of trust and stability in the economy that we have achieved through great difficulty.”
veryGood! (37367)
Related
- Will the 'Yellowstone' finale be the last episode? What we know about Season 6, spinoffs
- This Top-Rated Rowing Machine Is $450 Off—and Is Selling Out!
- It's dumb to blame Taylor Swift for Kansas City's struggles against the Jets
- Baltimore police: 'Multiple victims' from active shooter situation near Morgan State
- Kylie Jenner Shows Off Sweet Notes From Nieces Dream Kardashian & Chicago West
- Michael Jordan, now worth $3 billion, ranks among Forbes' richest 400 people
- At 25 she found out she had the breast cancer gene. Now, she's grieving motherhood.
- Why Dakota Johnson and Chris Martin Have Kept Their Relationship So Private
- Sam Taylor
- How to enter $1 million competition for recording extraterrestrial activity on a Ring device
Ranking
- What to watch: O Jolie night
- 75,000 Kaiser Permanente health care workers launch historic health care strike
- 'A real tight-knit group:' Military unit mourns after 2 soldiers killed in Alaska vehicle crash
- How to enter $1 million competition for recording extraterrestrial activity on a Ring device
- Romantasy reigns on spicy BookTok: Recommendations from the internet’s favorite genre
- At least 2 dead in pileup on smoke-filled Arkansas highway
- 2030 World Cup set to be hosted by Spain-Portugal-Morocco with 3 South American countries added
- Neighbors react after Craig Ross, Jr. charged with kidnapping 9-year-old Charlotte Sena from Moreau Lake State Park
Recommendation
Can Bill Belichick turn North Carolina into a winner? At 72, he's chasing one last high
A Florida gator lost her complete upper jaw and likely would've died. Now, she's thriving with the name Jawlene
Lottery club members claim $1 million prize from Powerball jackpot just in the nick of time
New York City mayor heads to Latin America with message for asylum seekers: ‘We are at capacity’
Tarte Shape Tape Concealer Sells Once Every 4 Seconds: Get 50% Off Before It's Gone
San Francisco woman seriously injured after hit-and-run accident pushes her under a driverless car
Deion Sanders, underpaid? He leads the way amid best coaching deals in college football.
Man intentionally crashed into NJ police station while blaring Guns N' Roses, police say