ISTANBUL: Turkey’s central bank said on Thursday it had cut its main policy rate for the fourth consecutive month despite high inflation.

On the wishes of President Recep Tayyip Erdogan, the bank said it had lowered its benchmark rate from 10.5 per cent to 9pc.

With the latest cut, the rate has reached “a sufficient level with regard to growing risks concerning global demand”, the bank’s council said in a written statement.

It has therefore “decided to put an end to the cycle of lowering interest rates which began in August”, it added.

Erdogan had vowed to lower interest rates to single digits by the end of the year as he prioritises economic growth and jobs over price stability ahead of a general election next June.

Last year, interest rates fell from 19pc in September to 14pc in December.

They remained stable this year until the summer but have been cut every month since, while inflation has soared.

Turkey’s monetary policymakers are bucking the global trend of central banks raising interest rates to combat inflation, as high borrowing rates cool down the economy and prices.

Erdogan, a vocal opponent of higher borrowing costs, has called high interest rates his “biggest enemy”.

But the unconventional economic model has contributed to a plunge in the value of the lira.

The Turkish currency has fallen 28.5pc against the dollar since the beginning of January, after losing 44pc last year.

Turkish inflation surged past 85pc in October, its highest level since 1998, official data shows.

Independent economists, however, say the actual rate is more than twice as high.

Published in Dawn, November 25th, 2022

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

IMF’s firm stance
Updated 05 Feb, 2023

IMF’s firm stance

Pakistan needs to complete the review to stave off a default as well as to unlock inflows from other multilateral and bilateral lenders.
Grotesque bigotry
05 Feb, 2023

Grotesque bigotry

FREEDOM to profess one’s faith is guaranteed by the Constitution of Pakistan. However, for the country’s Ahmadi...
Kashmir reflections
05 Feb, 2023

Kashmir reflections

ASIDE from Kashmir Day, which the nation is observing today as an official holiday, there are a number of other days...
Crisis conference
Updated 04 Feb, 2023

Crisis conference

PTI's refusal to engage with the govt in such testing times will only be seen as sign of ideological bankruptcy.
Revenge politics
04 Feb, 2023

Revenge politics

A SENSE of déjà-vu prevails as cases pile up against PTI politicians, many of whom, along with their allies and...
Inappropriate remarks
04 Feb, 2023

Inappropriate remarks

OFFICIALS of the state, especially when representing the country at international forums, need to choose their words...