In April, Turkey’s annual inflation rate surged to 69.8%, as per official data released on Friday. This marks a further escalation from March, when inflation stood at 68.5%, underscoring the persistent challenges in addressing the country’s cost-of-living crisis.
The Turkish central bank embarked on a series of interest rate hikes starting from June 2023, gradually raising its key rate from 8.5% to 50%. These measures were aimed at curbing soaring consumer prices, a move initially resisted by President Recep Tayyip Erdogan.
Despite Erdogan’s initial objections to tightening monetary policies, the central bank persisted in its efforts, eventually gaining acceptance from the president. This shift led to a significant increase in the key rate over several months.
In its latest decision, the central bank opted to maintain borrowing costs at their current levels. However, it cautioned that further rate hikes could be necessary if inflation continues to worsen, highlighting the ongoing vigilance required to stabilize the economy.
Erdogan, who had previously attributed inflation to high interest rates, eventually embraced conventional economic principles after securing re-election. He expressed confidence in his economic team, led by Finance Minister Mehmet Simsek, signaling a return to orthodox economic policies.
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