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Turkey Faces Rates Impasse as Inflation Hits 20-Year High

  • Annual CPI reached 48.7% in January, driven by energy costs
  • Turkey paused an easing cycle last month as prices soared
Visitors at Taksim square in Istanbul in October, 2021. 

Visitors at Taksim square in Istanbul in October, 2021. 

Photographer: Moe Zoyari/Bloomberg
Updated on

Turkey’s inflation accelerated to its highest level since President Recep Tayyip Erdogan took power two decades ago, challenging a push for lower borrowing costs that’s battered the lira and hit his working class base ahead of next year’s elections. 

Consumer price inflation surged to an annual 48.7% last month, the highest since April 2002, leaving the central bank in a tricky position where raising rates will anger Erdogan but cutting them will only add to runaway price increases.