Turkey’s central bank on Thursday kept its key interest rate unchanged for the third month in a row, with annual inflation recorded at over 75 percent in May, Agence France-Presse reported.
The bank’s monetary policy committee said it had decided to keep the policy rate constant at 50 percent but would remain attentive to inflation risks.
“The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed,” it said.
Turkey’s annual inflation rate increased to 75.45 percent in May, but the central bank believes consumer prices have finally peaked and will begin to slow next month.
“While we think inflation has now reached a peak, the pace of disinflation over the second half of the year is unlikely to be fast enough to allow the central bank to cut interest rates anytime soon,” said Nicholas Farr, emerging Europe economist at London-based research firm Capital Economics.
Turkey has been battling a cost-of-living crisis that prompted President Recep Tayyip Erdoğan to drop his opposition to interest-rate hikes to combat inflation.
The central bank began to raise its key rate in June 2023, gradually taking it from 8.5 percent to 50 percent.