Turkey’s central bank holds the rate at a historic high of 50%: the fight against inflation continues

Turkey’s central bank has maintained the key rate at 50% for the fifth time in a row, the highest level since 2002. This decision, predicted by economists, is aimed at slowing inflation, which in July 2024 stood at 61.8%, compared to 71.6% in June of the same year. The central bank plans to reduce inflation to 38% by the end of 2024, continuing to pursue a tight monetary policy until a sustained price decline is achieved.

The central bank stresses that the current rate will remain in place until inflation risks are reduced to a sustainable level and inflation approaches target levels. It is worth noting that the rate was last raised in March 2024 from 45% to the current 50%. Amid continued economic pressure, Turkey’s external debt reached a record $500 billion, 44.7% of the country’s GDP.