Turkiye: Central Bank raises lending rate to 46%

Shafaq News/ Turkiye’s Central Bank (TCMB) announced an emergency decision on Thursday to raise its lending rate to 46%, as policymakers assessed potential risks to inflation expectations.

In a statement, the central bank said it kept its benchmark one-week repo rate unchanged at 42.5% and maintained the overnight borrowing rate at 41%.

“Furthermore, TL and FX liquidity measures have been introduced to limit market volatility.” the statement added, “In order to maintain the sound functioning of financial markets, additional actions will be taken if deemed necessary.”

The bank also signaled a willingness to tighten monetary policy further if inflationary pressures worsen.

A comprehensive summary of the bank's discussions and decisions will be released within five working days.

The move comes amid a sharp decline in the Turkish lira, which tumbled on Wednesday following the arrest of Istanbul Mayor Ekrem İmamoğlu, a key political rival of President Recep Tayyip Erdoğan. The arrest rattled investors and heightened market volatility.

The currency was trading at 39 liras per dollar.