Türkiye's annual inflation rate stood at 38.2 percent in June, according to the Turkish Statistical Institute. The producer price index increased by 6.50 percent month-on-month in June, and rose by 40.4 percent on a year-on-year basis.
Turkish President Recep Tayyip Erdogan, who was re-elected in May, assembled his new economic team last month, raising hope that the country might move away from its unorthodox strategy of maintaining low interest rates even when inflation soars.
To address the rising cost of living and the devaluation of the Turkish currency, Erdogan appointed former U.S.-based bank executive Hafize Gaye Erkan as the governor of the Turkish Central Bank, and Mehmet Simsek, a well-known former banker, as the country's treasury and finance minister.
However, the Turkish currency continues to depreciate against the U.S. dollar after the central bank hiked the interest rate to a level that is below market expectations last month.
The central bank raised the interest rate from 8.5 percent to 15 percent in June, the first increase in 27 months. The bank also signaled that the monetary tightening would continue "in a timely and gradual manner until a significant improvement in the inflation outlook is achieved."
The Turkish lira has experienced a significant decline of over 60 percent against the U.S. dollar in the past two years.
The country's inflation rate recorded a 24-year high of 85.5 percent in October last year. The annual inflation rate has slowed since then and hit 39.6 percent in May.
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