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Turkish Central Bank Raises Interest Rates to 40%

Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
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Turkish Central Bank Raises Interest Rates to 40%

Turkish Central Bank raised interest rates double the expected. (The central bank’s website)
Turkish Central Bank raised interest rates double the expected. (The central bank’s website)

Türkiye’s central bank raised its policy rate by a larger-than-expected 500 basis points to 40% on Thursday, in an unexpected step.
The central bank is expected to raise its policy rate by 250 basis points to 37.5% this week, and reach 40% by year-end, a Reuters poll showed on Monday.
The bank has raised its one-week repo rate (TRINT=ECI) by 3,150 basis points since June.
The existing level of domestic demand, and geopolitical risks keep inflation pressures alive, the bank said following the Monetary Policy Committee meeting.
The committee will determine policy decisions to create the necessary financial conditions for a sustained decline in the underlying inflation trend, aiming to reach the 5 percent inflation target in the medium term.
The improvement in external financing conditions, continued increase in foreign exchange reserves, positive impact of demand rebalancing on current account balance, and the increase in domestic and foreign demand for Turkish lira-denominated assets contribute significantly to exchange rate stability and the effectiveness of monetary policy.
In light of these developments, a decline in the underlying trend of monthly inflation is observed.
Indicators of inflation and underlying trend of inflation will be closely monitored, and the Committee will continue to decisively use all the tools at its disposal in line with its main objective of price stability.
The Committee will continue to make its decisions in a predictable, data-driven, and transparent framework.
According to the monthly consumer tendency survey released by the Turkish Statistical Institute (TUIK), the consumer confidence index in Türkiye was up by 1.1% month-on-month in November this year to 75.5 points.
Sub-indices for the present financial situation of households increased 2.7% and financial situation expectations of households over the next 12 months gained 2.6%.
The index for general economic situation expectations over the next 12 months went up 0.6% in November from the month prior.
On the other hand, assessments on spending for durable goods over the next 12 months fell 0.6%.

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EU May Suspend Syria Sanctions on Energy and Transport

FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
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EU May Suspend Syria Sanctions on Energy and Transport

FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo
FILE PHOTO: A general view of the commercial harbor of Syria's coastal city of Tartous, Syria, December 14, 2024. REUTERS/Umit Bektas/File Photo

The European Union may soon suspend sanctions on Syria related to energy and transport but has yet to agree on whether to ease restrictions on financial transactions, according to three diplomats and a document seen by Reuters.
EU foreign ministers will discuss the matter at a meeting in Brussels on Monday. The bloc’s foreign policy chief Kaja Kallas told Reuters on Wednesday she hopes a political agreement on easing the sanctions can be reached at the gathering.
Europe’s approach to Damascus began to shift after Bashar al-Assad was ousted as president in December by Hayat Tahrir al-Sham (HTS), which the United Nations designates as a terrorist group.
Officials see transport as key for helping Syria’s airports become fully operational, which in turn could facilitate the return of refugees. Energy and electricity are similarly seen as important for improving living conditions to help stabilize the country and encourage citizens to come back.
According to an EU document seen by Reuters, diplomats from the bloc's 27 members recommended taking swift action towards suspending the restrictions "in sectors necessary for economic stabilization and launch of economic reconstruction of Syria, such as those regarding energy and transport”.
The diplomats, who are part of a group that negotiates the EU’s foreign policy positions on issues related to the Middle East and North Africa, also recommended “assessing options for reopening banking and investment relations with Syria”.
“The easing of EU restrictive measures would be rolled out in a staged approach and in a reversible manner, regularly assessing if the conditions in Syria allow for further suspension,” the diplomats wrote, pointing to the need for respect for fundamental freedoms and an inclusive transition.
The wording of the document represents a compromise among EU capitals. Some governments want to move quickly to suspend sanctions, while others prefer a more careful and gradual approach to ensure Europe retains leverage.
If a political agreement is announced on Monday, European officials would proceed to work on the technical details of a suspension.
A number of sanctions should remain in place, according to the document, including measures related to the Al-Assad regime, illicit drug trade and arms trade.