Turkish central bank lifts rates for seventh straight meeting
Turkey's central bank has lifted interest rates for the seventh straight meeting in its continued fight against significant inflation, though this month's hike was more moderate than the last.
The Monetary Policy Committee has increased its main one-week repo auction rate from 40% to 42.5%, as expected by economists.
That came after 0.5 percentage-point hikes in the past three meetings.
"The existing level of domestic demand, stickiness in services inflation, and geopolitical risks keep inflation pressures alive," the central bank said in a statement.
"On the other hand, recent indicators suggest that domestic demand continues to moderate as monetary tightening is reflected in financial conditions."
Acknowledging that inflation expectations and pricing behaviour had "started to show signs of improvement", it said that the decline in the underlying trend of monthly inflation has continued.
Inflation in Turkey picked up to an annual rate of 62% in November from 61% the month before, but was well below the 24-year peak of 85.5% reached in October 2022.
"Taking into account the cumulative and lagged effects of monetary tightening, the Committee will continue to determine its policy decisions in a way that will create monetary and financial conditions necessary to ensure a decline in the underlying trend of inflation and to reach the 5% inflation target in the medium term."