Turkiye's CBRT hikes key interest rate by another 500 bps to 40%

This is the sixth straight rise under new governor Hafize Gaye Erkan, appointed in June this year. The bank has raised its one-week repo rate by 3,150 basis points since June, with 500-point hikes in the previous two months.

"The current level of monetary tightness is significantly close to the level required to establish the disinflation course," a CBRT statement said.

"Accordingly, the pace of monetary tightening will slow down and the tightening cycle will be completed in a short period," it noted.

Turkish Statistical Institute (TurkStat) data show the country’s annual inflation eased to 61.36 per cent in October from a nine-month high of 61.53 per cent in the preceding month.

"Headline inflation edged down in October and remains in line with the outlook presented in the most recent Inflation Report. The existing level of domestic demand, the stickiness in services inflation and geopolitical risks keep inflation pressures alive. On the other hand, recent indicators suggest that domestic demand has started to moderate as the monetary tightening is reflected in financial conditions," the central bank further said.

The central bank expects inflation to rise from around 61.4 per cent last month to peak at 70-75 per cent in May next before dipping to about 36 per cent by the end of next year.

Fibre2Fashion News Desk (DS)