Turkey’s central bank has raised interest rates to 40 percent, its highest level in nearly two decades, in a significant move to tame the country’s runaway inflation after the country’s president, Recep Tayyip Erdogan, had previously defied economic convention by cutting rates to slow price increases.
The increase of 5 percentage points on Thursday, which was larger than expected and the sixth consecutive increase by the bank, came as inflation in Turkey is running at 61.36 percent.
That has sent the cost of basic household necessities soaring and sharply devalued the country’s currency, the lira.
Under Mr. Erdogan, Turkey has struggled with persistently high inflation in recent years.
As a result, Turkey’s gross domestic product, the primary measure of economic output, boomed to nearly more than $1 trillion, making it the world’s 19th-largest economy.
Recep Tayyip Erdogan, Erdogan