Türkiye’s central bank raises interest rate less than expected, to 17.5%

Türkiye's central bank hiked its policy rate by 250 basis points to 17.5% on Thursday, Report informs via Reuters.

The bank said after its monetary policy committee meeting that it will continue to tighten monetary policy and expected further upwards pressure on inflation due to recent tax hikes.

"To increase the functionality of market mechanisms and strengthen macro financial stability, the Committee will continue to simplify and improve the existing micro- and macroprudential framework," it said.

"Guided by impact analyses, the simplification process will continue to be gradual. In this context, in addition to the increase in the policy rate, the Committee has made decisions on quantitative tightening and selective credit tightening to support the monetary policy stance," the bank added.

The bank had raised its key rate by 650 basis points to 15% in June and had been expected to lift it to 20% this time, according to the median estimate in a Reuters poll.