Turkey's Central Bank held its policy rate at 14% for a seventh straight month on July 21, even with an inflation rate of 78.62 percent.
Following its monthly monetary policy committee meeting, the bank said in a statement that "geopolitical risks" continue to affect the world in a negative way and the "probability of a recession" is increasing.
The bank said that it expects a disinflation process to start on the back of strengthened measures for sustainable price and financial stability along with the sustainment of global peace.
“The increase in inflation is driven by rising energy costs resulting from geopolitical developments and effects of pricing formations that are not supported by economic fundamentals,” the bank said.
Turkey's annual inflation jumped to a two-decade high of 78.62% in June, according to official data released on July 4. This makes it the highest reading since September 1998, when annual inflation was 80.4% and Turkey was battling to end a decade of chronically high inflation.
According to unofficial data from the ENAG Inflation Research Group, an independent institution set up in 2020 to track the country’s inflation, Turkey’s annual consumer price inflation rate was 175.55% in June, far higher than official claims.