Turkey's c-bank raises policy rate to 17%

"In the forthcoming period, tightness of monetary policy stance will be decisively sustained until strong indicators point to a permanent fall in inflation in line with the targets and to price stability," the central bank said in a statement.

Recent restrictions introduced to limit the spread of the coronavirus create uncertainties in the short-term outlook of economic activity, particularly the services sector, although national income data and indicators for the last quarter point to a strong course in economic activity, the central bank noted. In addition, strengthening domestic demand underpinned by the high credit growth during the pandemic increases the current account deficit.

The central bank last changed its policy rate in November, increasing it to 15% from 10.25% due to higher than expected inflation rate.

Turkey's consumer prices rose by 14.03% year-on-year in November, after increasing by an annual 11.89% the month before and by 11.75% in September, the country's statistical office said earlier this month.