Turkey's Central Bank Hikes Interest Rate to 42.5% Amid High Inflation

Seventh consecutive hike signals nearing end of tightening cycle, with potential completion at 45% next month.

Turkey's central bank has raised its key interest rate by 2.5 percentage points to 42.5% in an effort to combat high inflation, which rose to 61.98% last month.
This is the seventh consecutive interest rate hike by the bank, taking borrowing costs from 8.5% to the current 42.5%.
The bank has signaled that the tightening cycle could soon end, maintaining monetary tightness as long as needed to ensure sustained price stability.
The series of rate hikes came after President Recep Tayyip Erdogan appointed a new economic team following his reelection in May, reversing his previous policy of cutting rates to fight inflation.
Analysts predict that the central bank will likely complete its rate hikes next month at 45%, halting the tightening before the local elections in March.