Turkey Interest Rate

The Central Bank of Turkey hiked its benchmark rate by 350bps to 46% in its April 2025 meeting, contrasting with market expectations that favored a hold, and marking a sharp contrast with the three consecutive rate cuts from the three past decisions. The TCMB also noted that policy will remain tight until price stability is achieved. The Monetary Policy Committee noted that the latest leading indicators suggested domestic demand rose more than expected in the start of the year, warranting tighter monetary policy despite citing that underlying inflation trends were lower in March. The Committee also cited that rising protectionism in global trade risked disrupting the disinflation process that allowed for rate cuts in the last meetings. While not making a direct reference, the MPC also lifted rates to ease pressure on the lira after President Erdogan's jailing of his main political rival drove the currency to plunge since the central bank's last cut.