Turkey’s central bank on Thursday hiked its benchmark policy rate by 200 basis points to 19%, twice the market forecast in what it called a “front-loaded” move to head off rising inflation and support the Turkish lira.
In a statement following its monthly policy committee meeting, the Central Bank of the Republic of Turkey (CBRT) repeated that a tight policy stance would be decisively maintained for an extended period and that additional monetary tightening will be delivered if needed.
The bank “decided to implement a front-loaded and strong additional monetary tightening,” the bank said.
The lira responded with a more than a 2% jump against the U.S. dollar to 7.36, its strongest level in two weeks.
The decision had been seen as a test of CBRT Governor Naci Ağbal’s battle against inflation and his hawkish rhetoric.
