MADRID, 24 Ago. (EUROPA PRESS) -

The Monetary Policy Committee of the Central Bank of Turkey, led by Governor Hafize Gaye Erkan, has decided to raise the reference rate from 17.5% to 25%, its highest level since 2004, as reported by the institution.

"The Committee decided to continue the monetary adjustment process in order to establish the disinflationary course as soon as possible, anchor inflation expectations and control the deterioration of price behavior," the entity explained.

In this way, the Turkish central bank has assured that it will determine the level of the reference interest rate in such a way that it creates the necessary monetary and financial conditions to ensure a decrease in the underlying trend of inflation and achieve the inflation target of 5%. in the medium term.

To this end, it has warned that the monetary adjustment "will be strengthened as much as necessary", in a timely and gradual manner, until a significant improvement in the inflation outlook is achieved.

Last July, Turkey's year-on-year inflation rate stood at 47.83%, compared with 38.21% in June, thus ending a sequence of eight consecutive declines in the price index and substantially moving away from the medium-term stability target of 5%.

Since Hafize Gaye Erkan took office as governor of the Central Bank of Turkey last June, the institution has undertaken a radical turn towards orthodoxy in its monetary policy with three consecutive rate hikes that have raised the price of money by 1,650 basis points, from 8.50% before the appointment to the current 25%.