ISTANBUL (AP) — Turkey’s central bank raised its key interest rate by 3.5 percentage points on Thursday, halting a three‑month easing streak as it confronts stubborn inflation, financial turbulence following the arrest of Istanbul’s mayor and aftershocks of global tariffs.
The Monetary Policy Committee lifted the benchmark one‑week repo rate to 46% from 42.5% and pushed the overnight lending and borrowing rates to 49% and 44.5%, respectively.
The committee said the “tight monetary policy stance will be maintained until a permanent decrease in inflation and price stability are achieved.”
“The main trend in inflation declined in March,” the committee noted, but warned that core goods inflation is likely to rise slightly in April “due to developments in financial markets,” while services inflation should remain flat.
It added that growing protectionism in global trade, referring to the aftermath of global retaliatory tariffs, could undercut Turkey’s disinflation path by affecting commodity prices and capital flows.
Iris Cibre, a financial markets expert, called the decision “very positive” for the bank’s credibility, which experts criticized in the past for being open to political interventions in its decision making.
“There were some comments that such a thing would not be allowed politically. The Central Bank has refuted these comments. This is very positive in terms of the credibility of the Central Bank.”
Cibre said the hike showed policymakers can act “more freely politically,” even though Turkey’s President Recep Tayyip Erdogan has long favored lower borrowing costs. “We all know that politics is in favor of lowering interest rates,” she said but warned of further financial risks due to limited credits,
“There is a 2% credit growth limit. So, it will continue to create serious problems for companies. This will increase unemployment, and it seems like the economy will slow down for longer than expected.”
Cibre noted that U.S. Federal Reserve officials have hinted they will wait to see the full impact of recently announced retaliatory tariffs between the U.S and other countries before adjusting rates. “That’s exactly what our Central Bank emphasizes,” she said.
High inflation in Turkey has been attributed to a combination of factors, including rising energy prices, the economic fallout from the COVID-19 pandemic, and Erdogan’s past unconventional economic policy of lowering interest rates despite soaring inflation.
Erdogan has long argued that high interest rates cause inflation — a theory that runs against mainstream economic theory.
In 2023, Erdogan appointed a new economic team, signaling a shift away from his previous unorthodox policies. The team initially implemented a series of interest rate hikes to combat inflation. After maintaining the interest rate at 50% for several months, the bank had embarked on a gradual cycle of rate cuts until today.
This story corrects credit growth limit cited by Cibre to 2%.
Workers deliver goods to a shop at Eminonu commercial district in Istanbul, Turkey, Thursday, April 17, 2025. (AP Photo/Francisco Seco)
A man pulls a trolley with goods at Eminonu commercial district in Istanbul, Turkey, Thursday, April 17, 2025. (AP Photo/Francisco Seco)
People carry goods at Eminonu commercial district, in Istanbul, Turkey, Thursday, April 17, 2025. (AP Photo/Francisco Seco)
DUBAI, United Arab Emirates (AP) — U.S. President Donald Trump said Iran wants to negotiate with Washington after his threat to strike the Islamic Republic over its bloody crackdown on protesters, a move coming as activists said Monday the death toll in the nationwide demonstrations rose to at least 544.
Iran had no immediate reaction to the news, which came after the foreign minister of Oman — long an interlocutor between Washington and Tehran — traveled to Iran this weekend. It also remains unclear just what Iran could promise, particularly as Trump has set strict demands over its nuclear program and its ballistic missile arsenal, which Tehran insists is crucial for its national defense.
Meanwhile Monday, Iran called for pro-government demonstrators to head to the streets in support of the theocracy, a show of force after days of protests directly challenging the rule of 86-year-old Supreme Leader Ayatollah Ali Khamenei. Iranian state television aired chants from the crowd, who shouted “Death to America!” and “Death to Israel!”
Trump and his national security team have been weighing a range of potential responses against Iran including cyberattacks and direct strikes by the U.S. or Israel, according to two people familiar with internal White House discussions who were not authorized to comment publicly and spoke on condition of anonymity.
“The military is looking at it, and we’re looking at some very strong options,” Trump told reporters on Air Force One on Sunday night. Asked about Iran’s threats of retaliation, he said: “If they do that, we will hit them at levels that they’ve never been hit before.”
Trump said that his administration was in talks to set up a meeting with Tehran, but cautioned that he may have to act first as reports of the death toll in Iran mount and the government continues to arrest protesters.
“I think they’re tired of being beat up by the United States,” Trump said. “Iran wants to negotiate.”
He added: “The meeting is being set up, but we may have to act because of what’s happening before the meeting. But a meeting is being set up. Iran called, they want to negotiate.”
Iran through country's parliamentary speaker warned Sunday that the U.S. military and Israel would be “legitimate targets” if America uses force to protect demonstrators.
More than 10,600 people also have been detained over the two weeks of protests, said the U.S.-based Human Rights Activists News Agency, which has been accurate in previous unrest in recent years and gave the death toll. It relies on supporters in Iran crosschecking information. It said 496 of the dead were protesters and 48 were with security forces.
With the internet down in Iran and phone lines cut off, gauging the demonstrations from abroad has grown more difficult. The Associated Press has been unable to independently assess the toll. Iran’s government has not offered overall casualty figures.
Those abroad fear the information blackout is emboldening hard-liners within Iran’s security services to launch a bloody crackdown. Protesters flooded the streets in the country’s capital and its second-largest city on Saturday night into Sunday morning. Online videos purported to show more demonstrations Sunday night into Monday, with a Tehran official acknowledging them in state media.
In Tehran, a witness told the AP that the streets of the capital empty at the sunset call to prayers each night. By the Isha, or nighttime prayer, the streets are deserted.
Part of that stems from the fear of getting caught in the crackdown. Police sent the public a text message that warned: “Given the presence of terrorist groups and armed individuals in some gatherings last night and their plans to cause death, and the firm decision to not tolerate any appeasement and to deal decisively with the rioters, families are strongly advised to take care of their youth and teenagers.”
Another text, which claimed to come from the intelligence arm of the paramilitary Revolutionary Guard, also directly warned people not to take part in demonstrations.
“Dear parents, in view of the enemy’s plan to increase the level of naked violence and the decision to kill people, ... refrain from being on the streets and gathering in places involved in violence, and inform your children about the consequences of cooperating with terrorist mercenaries, which is an example of treason against the country,” the text warned.
The witness spoke to the AP on condition of anonymity due to the ongoing crackdown.
The demonstrations began Dec. 28 over the collapse of the Iranian rial currency, which trades at over 1.4 million to $1, as the country’s economy is squeezed by international sanctions in part levied over its nuclear program. The protests intensified and grew into calls directly challenging Iran’s theocracy.
Nikhinson reported from aboard Air Force One.
In this frame grab from video obtained by the AP outside Iran, a masked demonstrator holds a picture of Iran's Crown Prince Reza Pahlavi during a protest in Tehran, Iran, Friday, January. 9, 2026. (UGC via AP)
In this frame grab from footage circulating on social media from Iran shows protesters taking to the streets despite an intensifying crackdown as the Islamic Republic remains cut off from the rest of the world in Tehran, Iran, Friday, Jan. 9, 2026.(UGC via AP)
In this frame grab from footage circulating on social media from Iran showed protesters once again taking to the streets of Tehran despite an intensifying crackdown as the Islamic Republic remains cut off from the rest of the world in Tehran, Iran, Saturday Jan. 10, 2026. (UGC via AP)
