Central Bank of Turkey Holds Key Interest Rate at 50%

On Thursday, June 27, the Central Bank of Turkey announced it would maintain its key interest rate at 50% per annum. This marks the third consecutive meeting where the rate has remained unchanged.

The last rate adjustment occurred in March, when it was raised by 500 basis points from 45% to 50%, the highest level in 22 years. This decision was driven by rising inflation that outpaced forecasts.

To curb inflation since the summer of 2023, the Central Bank of Turkey has raised the rate nine times, increasing borrowing costs by a total of 4,150 basis points.

On May 25, the regulator once again kept the key rate at 50% per annum. Before this, the rate had been increased for eight consecutive months.

The first hike took place in June 2023, nearly doubling the rate from 8.5% to 15% per annum. In July, the Central Bank raised the rate to 17.5%, in August to 25%, and in September to 30%. Following the October meeting, the rate was increased to 35%, in November to 40%. In December, the rate rose to 42.5%, in January 2024 to 45%, and in March to 50%. The rate remained unchanged in both April and May.