The Turkish central bank has not touched interest rates despite extremely high inflation. The key interest rate will remain at 14 percent, the central bank announced on Thursday in Ankara. The monetary authorities have kept interest rates stable since January.

The key interest rate is well below the very high inflation rate. Consumer prices were up almost 70 percent year-on-year in April. Producer prices even increased by 122 percent. The increase in energy and food prices as a result of the Ukraine war and new supply chain problems have exacerbated the development.

In a statement, the central bank nevertheless held out the prospect of continuing its loose monetary policy.

According to current economic theory, the central bank should actually raise interest rates significantly in view of the high inflation. However, the central bank is being put under pressure by President Recep Tayyip Erdogan. He describes himself as an “enemy” of interest rates.