Turkish Central Bank may increase discount rate again

17 July 2023

According to sources cited by Hürriyet on Monday, Turkey's central bank is considering announcing another increase in the key discount rate in July, potentially raising it to 16.5-17%. Some market participants even speculate that the rate could be raised as high as 20%.

 

The central bank's meeting is scheduled for July 20. This potential rate hike comes after the bank raised the discount rate in June for the first time in 27 months, from 8.5% to 15%. The decision was made under the leadership of the new head of the Central Bank, Hafize Gaye Erkan.

 

Following the previous rate hike, the Turkish lira experienced a significant decline against the US dollar, reaching a record low of 26 liras per dollar. It is anticipated that the exchange rate of the lira may stabilize within the range of 26-30 per dollar for the next few months, according to various forecasts.

 

 

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Based on materials from TASS