Turkey’s new central bank governor delivered a sobering assessment on inflation but pledged to stick with a “gradual” cycle of monetary tightening despite more than doubling the forecast for price gains, Bloomberg News reported. At an event on Thursday that marked her public debut, Governor Hafize Gaye Erkan had the task of restoring the credibility of an institution in need of rehabilitation in the eyes of the markets after years of unconventional measures championed by President Recep Tayyip Erdogan. Erkan, appointed last month after long stints in the US at Goldman Sachs Group Inc.

Turkey’s central bank has rolled out new measures to curb credit-card spending and limit loans to some industries as it leans on backdoor tightening to get a grip on inflation without crashing the economy, Bloomberg News reported. Days after a second interest-rate hike that fell short of expectations, policymakers announced rule changes that will make it more costly for consumers to use credit cards for cash withdrawals. The central bank is also imposing a stricter growth limit on car loans and some commercial credit, according to its announcement on Tuesday.

Turkey will continue its monetary policy U-turn, which began with a sharp post-election rate hike last month, until the inflation outlook improves significantly, the central bank said on Monday, Reuters reported. The hawkish policy guidance came as data showed the central bank's net foreign reserves recorded their biggest weekly leap on record as the bank eased off interventions in the currency market to stabilise the lira.

Turkey's central bank hiked its key rate by 650 basis points to 15% on Thursday and said it would go further in a reversal of President Tayyip Erdogan's policy, although the post-election tightening missed expectations and the lira fell, Reuters reported. In its first meeting under new Governor Hafize Gaye Erkan, the bank changed course after years of monetary easing in which the one-week repo rate had dropped to 8.5% from 19% in 2021 despite soaring inflation. Analysts said that the move suggested Erkan might have limited room to aggressively tackle inflation under Erdogan's watch.

Turkey's newly appointed Finance Minister Mehmet Simsek said on Sunday that the country has no choice but to return to "rational ground" to ensure predictability in the economy, Reuters reported. President Tayyip Erdogan named Simsek to his cabinet on Saturday to tackle Turkey's cost-of-living crisis and other strains, in a clear sign that his newly elected government would return to more orthodox economic policies. In a handover ceremony, Simsek said the main goal of the new government will be to increase social welfare.

Turkey’s markets slid as the nation heads for a runoff election, with stronger-than-expected support for President Recep Tayyip Erdogan wrong footing investors who were betting on a quick end to his unconventional economic policies, Bloomberg News reported. The benchmark stock index, the BIST-100, closed 6.1% lower after earlier falling as much as 6.7%, triggering a circuit breaker. Turkey’s dollar bonds were the biggest losers in emerging markets and the cost of protecting the debt against default jumped.

Turkey’s central bank asked lenders to limit dollar sales to companies that don’t have urgent payments and to prioritize meeting demand from special government-backed lira deposits, Bloomberg News reported. The monetary authority made the requests verbally on Tuesday, the people said, asking not to be named because the demands weren’t public. The central bank declined to comment. The lira savings plan, known locally as the KKM program, is designed to boost demand for the local currency with a state-guaranteed return on lira deposits that matches or beats any decline against the dollar.

The Turkish central bank has so tightened its grip over the foreign-exchange market in the runup to May’s presidential election that it’s become the matchmaker for most large transactions, according to several traders who spoke on condition of anonymity. Nearly every trade larger than a few million dollars is subject to its scrutiny and approval, they said, Bloomberg News reported. The traders describe a central bank that’s constantly on the phone with banks, that tracks and vets prices as soon as bids appear on trading platforms, and demands detailed reports on currency operations.

Turkey’s central bank held off from cutting interest rates on Thursday as the lira comes under pressure and the economy absorbs the fallout of last month’s catastrophic earthquakes, Bloomberg News reported. The Monetary Policy Committee led by Governor Sahap Kavcioglu left the one-week repo rate at 8.5%. The decision was in line with its guidance that the benchmark was at an “adequate” level following a half-a-percentage point decrease in February, a view the central bank reiterated in its statement on Thursday.