Current:Home > NewsTurkey’s central bank hikes key interest rate again to 45% to battle inflation -Trailblazer Capital Learning
Turkey’s central bank hikes key interest rate again to 45% to battle inflation
View
Date:2025-04-27 12:31:15
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! (1146)
Related
- The Louvre will be renovated and the 'Mona Lisa' will have her own room
- Search for missing Titanic sub yields noises for a 2nd day, U.S. Coast Guard says
- Another Rising Cost of Climate Change: PG&E’s Blackouts to Prevent Wildfires
- Her job is to care for survivors of sexual assault. Why aren't there more like her?
- Juan Soto praise of Mets' future a tough sight for Yankees, but World Series goal remains
- Ariana Madix Shares Surprising Take on Vanderpump Rules' Scandoval Reunion Drama
- Search for British actor Julian Sands resumes 5 months after he was reported missing
- Google, Amazon, Microsoft, Meta other tech firms agree to AI safeguards set by White House
- 'Vanderpump Rules' star DJ James Kennedy arrested on domestic violence charges
- Bernie Sanders announces Senate investigation into Amazon's dangerous and illegal labor practices
Ranking
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Woman sentenced in baby girl's death 38 years after dog found body and carried her back to its home
- Would Joseph Baena Want to Act With Dad Arnold Schwarzenegger? He Says…
- The Voice’s Niall Horan Wants to Give This Goodbye Gift to Blake Shelton
- Stamford Road collision sends motorcyclist flying; driver arrested
- They're trying to cure nodding syndrome. First they need to zero in on the cause
- John Durham, Trump-era special counsel, testifies about sobering report on FBI's Russia probe
- The Kids Are Not Alright
Recommendation
'No Good Deed': Who's the killer in the Netflix comedy? And will there be a Season 2?
John Durham, Trump-era special counsel, testifies about sobering report on FBI's Russia probe
Why LeBron James Is Considering Retiring From the NBA After 20 Seasons
U.S. Military Bases Face Increasingly Dangerous Heat as Climate Changes, Report Warns
'Vanderpump Rules' star DJ James Kennedy arrested on domestic violence charges
Obama family's private chef dead after paddle boarding accident at Martha's Vineyard
Jason Sudeikis Has a Slam Dunk Father-Son Night Out With His and Olivia Wilde's 9-Year-Old Otis
Michelle Obama launches a food company aimed at healthier choices for kids