Central Bank Increases Interest Rate by 6.25 Points

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The Central Bank of the Republic of Turkey (TCMB) Monetary Policy Committee released a statement after its meeting today (September 13) and announced that it has increased the political interest rate by 6.25 points.

With this interest rate hike, the political interest rate has increased from 17.75 percent to 24 percent.

Before the Central Bank announced its decision of interest rate hike, President and Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan stated, "I am saying, 'Let us decrease these high interest rates'."

After this statement, the exchange rate of US Dollar, which was around the level of 6.30 Turkish Lira, reached the level of 6.50 TRY.

Following the announcement of the Central Bank regarding interest rate hike, the exchange rate of dollar decreased to the level of 6.01 TRY.

Emphasis on inflation by the Central Bank

In the statement released by the Central Bank, it has been stated, "Despite the weakening in the domestic demand conditions, the disruption detected in pricing behaviors continue posing upside risks in terms of inflation outlook."

Additional monetary tightening is on agenda

In its statement, the Central Bank has emphasized again that it will continues using its all means to maintain price stability, adding that "it will introduce additional monetary tightening in case of need."

As of 3.01 p.m. today, the exchange rate of US Dollar was 6.23 TRY. (HK/SD)