Turkey holds key rate at 14% even with inflation at 61%

Bank blames rising prices on external factors, as economists see CPI hitting 70%

Tomatoes for sale at a street market in Istanbul. Turkey's consumers are grappling with surging prices as inflation hit its highest level in 20 years in March. © Reuters

SINAN TAVSAN, Nikkei staff writer

April 14, 2022 20:50 JST

Updated on April 14, 2022 22:34 JST

ISTANBUL -- Turkey's central bank on Thursday held the benchmark one-week repo rate at 14% for the fourth consecutive month, even as runaway inflation rose to a 20-year high of 61% in March.

Economists said inflation is set to spiral higher, to possibly 70%. However, the central bank seems to be caving to pressure from President Recep Tayyip Erdogan, who believes that higher interest rates will only push up inflation.