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Türkiye's Central Bank hikes interest rate to 40%

23 November 2023 15:16 (UTC +04:00)

The Turkish central bank exceeded expectations as it delivered a more sizable interest-rate hike than expected by markets on Thursday, APA reports.

The Monetary Policy Committee under Governor Hafize Gaye Erkan raised the benchmark rate by 500 basis points to 40%.

The expectation was for an increase of 250 basis points. The lira extended gains after the decision.

The MPC signaled it would slow the pace of tightening from now.

With its sixth straight rate hike since June, the central bank is turning another corner in ending an era of cheap money. Real rates are now in positive territory relative to projected inflation at the end of 2024, a gauge that’s preferred by policymakers when talking about monetary tightening. The central bank sees inflation at 36% in annual terms by then.