Central Bank hikes main interest rate to 19%

ANKARA

Turkey’s central bank on March 18 hiked its main interest rate by a higher-than-expected 200 basis points to 19 percent to counter rising inflation and the dropping value of the lira.

The bank said it "has decided to implement a front-loaded and strong additional monetary tightening" after seeing the annual inflation rate climb to 15.6 percent last month.

Considering the upside risks to inflation expectations, pricing behavior and the medium-term inflation outlook associated with these developments, the MPC [Monetary Policy Committee] has decided to implement a front-loaded and strong additional monetary tightening," the bank said in a statement.

Taking into account the end-2021 forecast target, a tight monetary policy will be maintained until strong indicators point to a permanent fall in inflation and price stability, the bank added.