Turkey Central Bank triples ınterest rates, record high exchange rates follow

The decision was made in an attempt to combat inflation, which has surged in recent months, and to stabilize the country's currency. The move has since prompted a significant rise in exchange rates, with the dollar reaching an all-time high of 24.50 Turkish liras, while the euro approached 27 Turkish liras.

The Central Bank's governor, Hafize Gaye Erkan, chaired the meeting, making her first policy decisions since assuming office. The bank's policy rate was increased 650 basis points, rising from 8.5% to 15%, in a move that surprised investors who had expected a smaller increase. It is the first major interest rate hike since September 2018, which led to a 625 basis point rise.

The decision has led to a significant increase in exchange rates. According to current exchange rates, sterling, which was sold for 30.25 Turkish Liras in the morning, rose to 31.35 Turkish Liras after the interest rate increase. The dollar/turkish lira exchange rate exceeded 24 for the first time, rising from around 23.80 Turkish Lira in the morning to 24.50 Turkish Lira at present. The Turkish lira has lost nearly 90% of its value against the US dollar over the last 10 years. Euro also increased significantly, starting the day at 26.05 Turkish liras and currently being sold at 26.95 Turkish liras, following the interest rate increase.

The Central Bank's move comes amid growing pressure on President Recep Tayyip Erdogan's government to take action on inflation, which has surged to a 15-year high and is causing significant problems for the country's citizens, hitting their spending power and increasing poverty levels.