The Central Bank of Turkey has halted its series of interest rate hikes, maintaining the steady rate of 45% as projected by market analysts. This move by the Monetary Policy Committee, under the new chairmanship of Fatih Karahan, marks a period of observation after a cumulative 36.5-percentage point increase in the previous nine months geared towards curbing inflation and safeguarding economic equilibrium.
Stabilization Phase in Turkey’s Monetary Policy
The Central Bank’s recent statements highlighted a satisfactory level of fiscal restraint to combat inflation. The Bank has indicated its commitment to preserving this stringent monetary environment for as long as necessary to foster a consistent disinflationary trend. The consistent policy rate for February reaffirms the Central Bank’s resolve in its strategic approach.
Throughout 2023, the Central Bank had adopted a stringent monetary stance, progressively increasing interest rates from June through to the beginning of the current year. The Bank’s aggressive policy aimed to reestablish fiscal stability, with the substantial rate hikes over several months reflecting this intention.
Cryptocurrency Dynamics Post-Interest Rate Announcement
Following the Central Bank’s announcement, a surge in Bitcoin‘s value against the Turkish lira was observed, partially influenced by the strengthening U.S. dollar. Data from CoinMarketCap showed that Bitcoin’s exchange rate against the Turkish lira climbed post-announcement, after being noted at 1.6 million prior to the decision.
The record high for Bitcoin against the Turkish lira was recently noted at 1.616 million, with market analysts predicting further gains. The Turkish lira’s decline against the U.S. dollar, coupled with Bitcoin’s appreciation, is expected to continue influencing this trend.
