This marks the seventh consecutive rate increase and brings the policy rate to its highest level in years.

The decision to raise the interest rate, widely anticipated in financial markets, represents a significant adjustment from the previous rate of 42.5 percent, aligning with market expectations.

The CBRT's Monetary Policy Committee took this bold step to address growing concerns regarding inflation and to promote overall economic stability. In a statement explaining the decision, the bank emphasized the importance of the move in establishing a disinflation course and asserted its commitment to maintaining this level for as long as necessary.

"To increase the functionality of the market mechanism and strengthen macro financial stability, the Committee continues to simplify and improve the existing micro- and macroprudential framework," the CBRT stated. It further highlighted its dedication to strengthening the monetary transmission mechanism to counter potential excess volatility in credit supply and deposit rates through macroprudential policy.

The CBRT emphasized its commitment to a proactive approach by stating: "Taking into account the 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 percent inflation target in the medium term."

This assertive move by the Turkish Central Bank reflects its dedication to addressing economic challenges head-on and underscores its commitment to maintaining stability amid inflationary pressures. The bank's vigilance is evident in its pledge to closely monitor inflation indicators and decisively use all available tools to achieve its main objective of price stability. (ILKHA)