Turkey's central bank keeps rate steady amid high inflation

Turkey’s central bank has kept its main interest rate unchanged for a fourth month running even as surging inflation has hit a 20-year high and eroded people’s purchasing power

ANKARA, Turkey -- Turkey’s central bank on Thursday kept its main interest rate unchanged for a fourth month even as surging inflation has hit a 20-year high and eroded people's purchasing power.

In a statement following a monetary policy committee meeting, the bank said it was keeping its policy rate “constant” at 14%.

The decision was in line with President Recep Tayyip Erdogan’s opposition to high borrowing costs in a bid to boost growth, investment and exports. The Turkish leader insists that raising interest rates cause inflation — a position that contradicts established economic thinking.

Turkey’s central bank has cut rates by 5 percentage points since September despite high inflation, then has paused them since January. The series of rate cuts last year triggered a currency crisis and rising consumer prices that have been aggravated by Russia’s invasion of Ukraine and soaring energy costs.