The not-so-peculiar inflation in Turkey

There are reasons why inflation has decreased despite the central bank's low interest rate policy

Inflation in Turkey, in itself, is hardly important for India and most other countries. However, we have a very interesting and important lesson from there.

The Central Bank of the Republic of Turkey (CBRT) has reduced its interest rate despite the high inflation in Turkey. Most economists have found the policy surprising. The CBRT has reduced interest rates from 24 per cent in mid-2019 to 8.5 per cent at present. What’s even more intriguing for many people is that the inflation rate has not risen further or stayed the same in recent quarters; it has halved! How did this happen?

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