The Central Bank of Turkey raised the key rate to 45%

The Monetary Policy Committee (MPC) of the Central Bank of the Republic of Turkey (CBRT) held its first meeting of the new year.

As expected, the central bank raised the key interest rate by 2.5 percentage points (p.p.) - from 42.5% to 45%. The current level of the key rate is the highest since 2003.

As part of the fight against inflation, the current increase in the key rate is the eighth in a row. The cumulative increase after tightening monetary policy in June of last year amounted to 36.5 p.p.

According to the regulator's press service, the level of tightness of monetary policy necessary to slow down inflation has already been achieved, and the current level of the policy rate will be maintained until there is a significant decrease in inflation and inflation expectations reach the target range.

According to the country's Statistical Institute, inflation in Turkey accelerated to 64.8% year-on-year in December, reaching a high of more than a year. In November, the price increase was 62%.

After the Central Bank's decision was announced, the Turkish lira depreciated by 0.2% against the US dollar.

The exchange rate of the Turkish lira against the dollar on Thursday is 30.2856 compared to 30.2324 at the end of trading on Wednesday, according to Interfax.