In view of the high inflation, the Turkish central bank has raised the key interest rate much more than expected. The key interest rate will rise by 7.5 percentage points to 25.0 percent, as the central bank announced on Thursday in Ankara after its monetary policy meeting. Economists had only expected a base rate of 20.0 percent on average. It was the third rate hike in a row.
However, the key interest rate is still below the inflation rate, which rose to 47.8 percent in July. With the big hike in interest rates on Thursday, the central bankers are likely to have tried to underpin their determination in the fight against high inflation. The Turkish lira, which has fallen in value again significantly since May, gained on the foreign exchange market against the euro and US dollar.