Turkey’s central bank sharply raises interest rates. That could signal an economic turnaround

By SUZAN FRASER and AYSE WIETING
Associated Press

ANKARA, Turkey (AP) — Turkey’s central bank has delivered a large interest rate increase, signaling a shift toward more conventional economic policies to counter sky-high inflation. The bank raised its key rate by 6.5 percentage points, boosting it to 15%. The increase is the first since March 2021 but lower than market expectations. It came at the bank’s closely watched first interest rate-setting meeting since Erdogan appointed two internationally respected officials to lead the bank and the finance ministry. The rate hike is an indication that the country is moving away from Erdogan’s unorthodox belief that lowering interest rates fights inflation. The bank said rates would be hiked further “as much as needed” in a “gradual manner.”