Turkey's Central Bank on Jan. 20 kept the benchmark 1-week repo rate -- its policy rate -- at 14 percent, in line with market expectations.
"Increase in inflation in the recent period has been driven by distorted pricing behavior due to unhealthy price formations in the foreign exchange market, supply side factors such as the rise in global food and agricultural commodity prices, supply constraints, and demand developments," the bank said in a statement following its first Monetary Policy Committee (MPC) meeting this year.
It expected a disinflation process to start on the back of recent measures taken to stabilize the currency.
The lira sank 44% in 2021 after 500 basis points worth of interest rate cuts amid surging inflation sent the currency spiraling to record lows of over 18 per dollar.
The central bank was pressured into cuts as President Recep Tayyip Erdoğan sought stimulus to spur economic growth.
Inflation in Turkey surged 36% last month — reaching a 19-year high and leaving many in the country of nearly 84 million struggling to buy food and other basic goods.