Turkey’s central bank kept interest rates on hold on January 16 amid growing calls for a fiscal stimulus as inflation is surging.
The bank kept its benchmark one-week repo rate at 24%, while inflation in December was galloping at 20%. After hitting a peak of more than 25% in October, Turkey started taming the rate of inflation in November when it dropped to 21.6%.
The bank’s monetary policy committee restated a previous commitment to maintaining high rates until inflation displays “significantly improved”. The official policy target of the Turkish Central Bank is an inflation rate no higher than 5%.
Turkey’s next interest rate decision is due on March 6.
President Recep Tayyip Erdogan has not been shy when it comes to applying political pressure on the Central Bank to drop interest rates.