Skip to content Skip to Search
Skip navigation

Turkey tightens monetary policy but holds rate steady

Turkey's finance minister Mehmet Simsek says he has faith in the country's measures to curb inflation Reuters/Umit Bektas
Turkey's finance minister Mehmet Simsek says he has faith in the country's measures to curb inflation

Turkey will continue to maintain a tight monetary stance until a “significant and sustained” decline in monthly inflation is seen, the country’s central bank said.

The bank’s monetary policy committee kept the key policy rate steady at 50 percent, adding it remains “highly attentive to inflation risks”. 

The central bank raised interest rates by 500 basis points to 50 percent in March following a deteriorating inflation outlook.



“Monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen,” the committee said in a statement.

The bank is targeting disinflation in the second half of the year through through moderation in domestic demand, real appreciation in the Turkish lira, and improvement in inflation expectations.

The central government aims to reach the 5 percent inflation target in the medium term by making necessary monetary and financial decisions, the committee said.

The annual inflation rate increased to 68.5 percent in March, beating the 67.07 percent recorded a month earlier, official data showed.

Central bank governor Fatih Karahan reiterated last month that the country will see disinflation in the second half of the year.

“Our determined stance on monetary policy will enable us to successfully achieve our targeted disinflation path,” he said.

Global rating agency Fitch has already upgraded Turkey’s long-term foreign currency issuer default rating to “B+” from “B”, driven by greater-than-expected monetary policy tightening to control inflation.

In February, finance minister Mehmet Şimşek said the country’s measures to curb inflation will prove effective, which should decline in the second half of the year.

The medium-term programme, launched in September 2023, intends to achieve price stability and single-digit inflation, he said.

Latest articles

Opec Secretary General Haitham Al Ghais says peak oil 'is not on the horizon'

Upstream oil and gas ‘needs more annual investment’

Annual capital expenditure for exploration and production in the upstream sector of the oil industry needs to increase by 22 percent by 2030 because of growing demand and cost inflation, experts say. A cumulative $4.3 trillion needs to be invested between 2025 and 2030, according to a report by the International Energy Forum (IEF) and […]

Rothschild Saudi

Edmond de Rothschild to run funding vehicle for Saudi projects

The Edmond de Rothschild Group is establishing a funding vehicle for infrastructure projects in Saudi Arabia along with the local firm SNB Capital, as part of a deal in which the Swiss investment bank will set up offices in the country.  Saudi Arabia’s massive economic diversification programme has run into financial obstacles as it faces […]

Turkey foreign property sales

Foreigners turning back on Turkish real estate

Foreign buyers are increasingly shunning the Turkish property market, wary of high prices, the expensive cost of living and a less welcoming environment for overseas real estate investors. There were only 2,064 residential units sold to foreign buyers in May, 35 percent down on the same month last year, data issued by the state statistics […]

2KEY8G1 Emirates Airline Airbus A380 aircraft landing. Aerial view of Emirates Airlines A380-800 airplane. An Emirates plane coming in to land at LAX; a spokesperson for Emirates said the contraventions were for safety reasons

US fines Emirates for operating in prohibited airspace

Emirates has been fined $1.5 million by the US Transportation Department for operating flights carrying JetBlue Airways’ JBLU.O designator code in prohibited airspace. The transportation department said that between December 2021 and August 2022, Emirates operated a significant number of flights carrying the JetBlue Airways code between the United Arab Emirates and the United States […]