The Central Bank of the Republic of Türkiye (CBRT) this week lifted its key interest policy rate by 5%, meeting the overall market forecast and affirming its monetary tightening cycle drive.
Accordingly, the bank raised its policy rate to 30% following increases in previous months.
The committee decided to continue the monetary tightening process to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behaviour, the bank said in a statement released after its Monetary Policy Committee (MPC) meeting.
“Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved. Inflation will remain close to the upper limit of the forecast range,” it warned.

The central bank earlier said inflation would likely rise to near 62% by year-end, higher than the upper band of its forecast. The bank hiked its year-end inflation forecast upwards for 2023, 2024, and 2025 in its third quarterly inflation report released in July.
Local lenders are now likely to increase the interest rates they offer for deposit accounts after the Central Bank’s move this week to boost the Turkish Lira deposits. According to sources interest rates on deposits may climb toward 50 percent.
The Central Bank this week sent instructions to local lenders according to which it raised from 2 percent to 2.5 percent the targeted monthly rise in the share of lira deposits in total deposits as part of efforts to make lira more attractive.
“Banks will have no other option but hike interest rates on deposits. If the rates climb towards 50 percent, holding foreign currencies will lose their appeal to investors,” the sources said.
The annual inflation rate moved up to 58.9 percent in August from 47.8 percent in July.
The interest rates for 3-month term deposits have been rising gradually since early August when they stood at around 28 percent.
According to data from the Central Bank, the interest rates for 3-month deposits rose from 37.59 percent on Sept.1 to 40.87 percent as of Sept. 8.