CB increases interest rates

During a meeting yesterday, the Monetary Policy Committee, chaired by Central Bank Governor Durmus Yilmaz, increased the policy rates 50 base points. Accordingly, overnight borrowing rate increased from 15.25 percent to 15.75 percent, and lending rate from 19.25 to 19.75 percent. A report released by the committee said, "The CB will continue to take necessary measures to prevent the potential second-round effects of the adverse developments in food and energy prices. Accordingly, the committee will consider the possibility of a further measured rate hike in the next meeting. The extent and timing of possible future rate hike will depend on developments in global markets, external demand, fiscal policy implementation, and other factors affecting the medium term inflation outlook."