ANKARA — The Central Bank of Turkey on Thursday hiked interest rates to 46% from 42.5%, marking a return to monetary tightening after a year-long pause. The move comes amid economic turmoil triggered by the arrest of Istanbul Mayor Ekrem Imamoglu.
Thursday’s meeting was the first since Imamoglu, a presidential contender from the main opposition Republican People’s Party (CHP), was detained on March 19 and subsequently jailed on March 23 on corruption charges, which he denies. Government critics say the arrest was politically motivated, aimed at sidelining a key rival to President Recep Tayyip Erdogan. His arrest led to a roughly 12% drop in the Turkish lira against hard currencies, prompting the central bank to sell nearly $50 billion in foreign reserves to curb the lira’s depreciation.
The decision reversed a rate-cutting cycle the central bank began in January, as inflation showed signs of easing. Year-on-year inflation fell to 38.1% in February, its lowest level in nearly two years, according to official data.
This is a developing story and will be updated.
