A woman walks past Türkiye's central bank in Ankara, Türkiye, on April 17, 2025. Türkiye's central bank raised its key interest rate by 350 points on Thursday, from 42.5 percent to 46 percent, reversing its previous easing cycle. (Mustafa Kaya/Handout via Xinhua)

ANKARA, April 17 (Xinhua) -- Türkiye's central bank raised its key interest rate by 350 points on Thursday, from 42.5 percent to 46 percent, reversing its previous easing cycle.

The bank's Monetary Policy Committee (MPC) acknowledged that the underlying inflation trend had moderated in March. However, it flagged an uptick in monthly core goods inflation for April and noted that domestic demand remained stronger than anticipated, potentially slowing the disinflation process.

"Leading indicators point to a level of domestic demand above projections despite some loss of momentum in the first quarter, suggesting a lower disinflationary impact," said the MPC.

Potential effects of the rising protectionism in global trade on the disinflation process through global economic activity, commodity prices, and capital flows are closely monitored, it said, adding that inflation expectations and pricing behavior continue to pose risks to the disinflation process.

Thursday's hike marks a notable shift from the central bank's stance in March, when it had cut the policy rate by 2.5 percentage points to 42.5 percent, citing an improving inflation trend observed in February.

Türkiye has been grappling with rising inflation for years. From June 2023 to March 2024, the central bank raised its key interest rate from 8.5 percent to 50 percent to tighten monetary policy and stepped into an easing cycle at the end of last year, supported by improving inflation indicators. ■