Turkey’s central bank on Thursday hiked its key interest rate by another 250 basis points to 45%.
The hike to the benchmark one-week repo rate was in line with economists’ expectations.
It comes amid an ongoing battle against double-digit inflation for Turkey’s monetary policymakers, with the rate hike the latest step in that effort.
Inflation in Turkey increased to 64.8% year-on-year in December, up from 62% in November, and the country’s currency, the lira, hit a new record low against the U.S. dollar earlier in January, breaking 30 to the greenback for the first time.
Analysts predict this will be the last hike for some time, especially with local elections approaching in March.
Inflation was bad for a while and Erdoğan insisted in lowering interest rates because he thought they cause inflation.
What changed that now they are rising them? Did he admit he was wrong?
Hiking interest rates don’t cause inflation, they cause your electoral support to go down. He won a close election, so now he can fix the problem without loosing power.
“fix”
Erdogan won the election in May. So now he’s dealing with the “find out” phase of fucking around and ignoring economists telling him that lowering interest rates to fight inflation was like fighting a fire by pouring napalm on it.