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Turkey’s Inflation Rate Soars To 67%

Consumer prices in Turkey rose 67% in February as the country continues to battle runaway inflation.

Economists polled by the Reuters news agency had forecast that the annual inflation rate within Turkey would climb to 65% last month.

The Turkish Statistical Institute said that hotels, cafes, and restaurants saw the greatest annual increase in February at 94.78%, followed by education at 91.84%.

Food and non-alcoholic beverage prices in the country increased 71.12% in February from a year earlier and jumped 8.25% on a monthly basis.

Between January and February, Turkey’s overall inflation rate increased 4.53%.

The big rise in February inflation has sparked concerns that Turkey’s central bank may have to start raising interest rates again after indicating it was pausing its monetary tightening policy.

Turkey’s key interest rate is currently at 45%, following a cumulative increase of 3,650 basis points since May 2023.

Runaway inflation is being fueled by Turkey’s weak currency, the lira, which is at a record low against the U.S. dollar.

The lira is currently trading at 31.43 to the greenback. The Turkish currency has lost 40% of its value against the American dollar in the past year, and 82.6% in the last five years.

Turkey’s policymakers say they are reluctant to raise interest rates again, especially ahead of the country’s elections on March 31 of this year.

However, economists say that the relentless inflation may force them to hike rates again after the upcoming elections.