Turkey's Central Bank Maintains Key Interest Rate at 50%

On July 23, Turkey's Central Bank decided to keep its key interest rate at 50% per annum, marking the fourth consecutive meeting without a change.

According to a statement on the regulator's website, core inflation in Turkey saw a noticeable decline in June. For July, the Central Bank expects a temporary rise in inflation driven largely by non-monetary factors, though this increase is anticipated to be limited.

"Considering the delayed effects of tightened monetary policy, the regulator will make decisions to ensure the monetary and financial conditions necessary to achieve the target inflation rate of 5% in the medium term," the statement said.

The last adjustment to the rate was made in March, when it was increased by 500 basis points from 45% to 50%. This is the highest level in 22 years and was implemented in response to inflation rates that surpassed forecasts.

Since the summer of 2023, Turkey's Central Bank has raised the rate nine times to combat inflation, raising borrowing costs by a total of 4,150 basis points.

Experts predict that the Central Bank of Turkey may lower the interest rate for the first time by the end of the year.