The Central Bank has raised the policy rate from 15% to 17.50%, implementing a hike for the second month in a row.

"The Committee has decided to continue the monetary tightening process to establish disinflation as soon as possible, anchor inflation expectations, and control the disruptions in pricing behavior," the banks's Monetary Policy Committee said in a statement.

"While global inflation is decreasing, it still remains above the long-term averages and the targets set by central banks. Therefore, central banks in many countries around the world continue their monetary tightening processes."

After the elections in May, changes in the cabinet, including the Finance Minister and the Central Bank Governor, led the government to make adjustments in its economic policies. Last month, for the first time in 27 months, the interest rate was raised from 8% to 15%.

Up until the elections, monetary policies had been determined based on President Recep Tayyip Erdogan's "low interest-low inflation" thesis.

After his re-election, Erdogan appointed Mehmet Simsek, known for advocating "orthodox" economic policies, as the minister of treasury and finance. Upon assuming the role, Simsek had stated that "we have no choice but to return to rational policies."

Source: English Bianet