2024 interest rate table: Turkey’s stagnant year and a last-minute surprise

After pursuing a low-interest-rate policy in 2022 and early 2023, Turkey transitioned to a high-interest-rate policy following the presidential and parliamentary elections. How was this new policy implemented throughout 2024?

Following the presidential and parliamentary general elections held in May 2023, Turkey shifted to a tight monetary policy and began a process of interest rate hikes. According to a report by Osman Nuri Cerit from Sputnik, while the Central Bank of the Republic of Turkey (TCMB) kept the policy rate at 19% in March 2021 during Naci Ağbal’s presidency, this rate was reduced to 8.5% through cuts made during 2021 and 2022 under the administration of Şahap Kavcıoğlu.

With Hafize Gaye Erkan assuming the presidency, the TCMB raised the interest rate for the first time in 27 months in June 2023, increasing it from 8.5% to 15%. During Erkan’s 7-month and 23-day tenure, the interest rate was gradually raised to 45%. Fatih Karahan, who took over after Erkan’s departure, kept the interest rate stable at 45% at the first Monetary Policy Committee meeting held in February.

While it was expected that the interest rate would be kept stable before the March 31 local elections, the TCMB raised the policy rate to 50% citing the “deterioration in the inflation outlook.” While the interest rate was kept stable at 50% throughout 2024, a surprise move was made in the last month of the year, and the policy rate was reduced to 47.5%.

News Source: 12punto