Consumer prices in Turkey recently rose by 79.6 percent. The Turkish central bank is reacting again – but unlike many central banks, not by raising interest rates.
The Turkish central bank lowered the key interest rate despite high inflation. The central bank in Ankara announced on Thursday that the value would be reduced from 14 to 13 percent. Turkish President Recep Tayyip Erdogan had already announced such a move in recent weeks.
Turkey is struggling with an economic crisis and high inflation. In July, consumer prices were 79.6 percent higher than in the same month last year. Unlike many other central banks, however, the Turkish central bank is not counteracting the development by raising interest rates. Experts cite political pressure as the reason.
There are several reasons for high inflation
Inflation in Turkey is driven by several factors. The weak national currency, the lira, has been driving up prices for a long time since it makes goods imported into Turkey more expensive due to the exchange rate. In addition, there are problems in the international supply chains that make preliminary products more expensive. In addition, the prices of energy and raw materials are rising, mainly because of the Russian war against Ukraine.
The central bank had left interest rates unchanged since December after a repeated cut triggered a significant slide in prices.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
