Turkey’s central bank raised its key interest rate by 7.5 percentage points on Thursday, a higher than expected increase, as it attempts to correct years of easy-money policies imposed by President Recep Tayyip Erdogan that left Turkey with major financial imbalances.
The bank said it increased its benchmark rate, the one-week repo rate to 25% from 17.5% in the third consecutive hike since Erdogan installed a new team of economic leaders after winning a difficult election in May.
The increase came after economists expressed concern that the government was acting too slowly to control inflation, which stands at 47.8%, putting the economy at risk over the long term.
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