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Türkiye's central bank hikes interest rate to 15%
Turkiye's central bank has raised interest rates for the first time in more than two years, in a bid to cool double digit inflation. The cost of borrowing money from the bank has gone up, from 8.5% to 15%. That's an increase of 650 basis points. As in other countries, low rate policies kept money cheap during the height of the pandemic. But newly appointed Finance Minister Mehmet Simsek says a return to higher rates is necessary in order to strengthen the Turkish lira and stabilise prices for imported goods. The central bank will have to balance the government's goal of driving economic growth with competitively priced Turkish exports along with the need to ease inflationary pressures on consumers, which Ankara says is its top fiscal policy priority.
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