LAST UPDATE 13:31
The central bank of Turkey kept the key interest rate unchanged at 14%, as expected, for the second consecutive month, as inflation rose again last month.
A further rise in inflation, which climbed to 48.7% in January from 36.1% in December, poses a dilemma for Turkey’s unorthodox economic experiment, which is based on the belief that lower interest rates can reduce inflation. and stimulate investment.
The fall of the pound, rising energy prices and the highest oil prices in the world have led to a 20-year high in inflation.
The central bank said the rise in inflation was attributed to “price developments not supported by fundamental economic figures”, as well as to supply-side factors and demand developments.
The bank stressed that “a comprehensive review of the policy framework is being carried out in order to encourage the continued use of the pound in all policy instruments”.
The central bank chose to keep interest rates stable at the previous monetary policy meeting after an aggressive easing cycle at the end of last year, which cut interest rates by 500 basis points over the past four months.
Source: Capital
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