The Turkish Central Bank (TCMB) announced a new interest rate hike of 250 basis points on Thursday, putting its benchmark one-week interest rate at 17.5%, after just a month ago announced a 650-point increase up to 15%, in an impressive record rise – the first in 27 months – that came after Erdoğan’s appointment of the new TCMB governor, Hafize Gaye Erkan. The measure announced today by the Central Bank seeks to combat inflation and stop the plummeting of the Turkish lira, which in the last month has lost 50% of its value against the euro and the dollar. In order to see interest rates at this level in Turkey, you have to go back to September 2021, when the loan rate was 18%: at that time, inflation was 19.58%, half of what it is currently.
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Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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