The Central Bank of Turkey (CBRT) will be keeping its interest rate unchanged for the second month in a row as the administration of President Recep Tayyip Erdogan struggles to contain surging prices.

The country’s Monetary Policy Committee (MPC) decided to keep the rate at a constant 14 percent following a meeting that took place on 17 February.

The MPC, headed by Central Bank Governor Şahap Kavcıoğlu, released a statement saying that Turkey’s increased inflation in the recent period “has been driven by pricing formations that are not supported by economic fundamentals, supply side factors such as the rise in global energy, food and agricultural commodity prices, supply constraints, and demand developments.”

“The Committee expects the disinflation process to start on the back of measures taken and decisively pursued for sustainable price and financial stability along with the decline in inflation owing to the base effect. Accordingly, the Committee has decided to keep the policy rate unchanged,” the statement added.

Just prior to the decision, President Erdogan said that “debate over interest rates has subsided significantly and exchange rates stabilized … it’s time to pull inflation back to single digits.”

Last year’s rate cuts resulted in a collapse of the Turkish lira, leaving the country more exposed to global price shocks.

By the end of 2021, the Turkish lira had lost around 44 percent of its value against the dollar. In January, Turkey’s inflation rate reached its highest level since 2002, according to official data.

According to opposition leaders, Erdogan’s government has put pressure on the statistics agency to downplay the surge in prices, affecting the president’s political support ahead of the 2023 general elections.

Meanwhile, the CBRT has stated that “the rise in inflation may last longer than previously anticipated due to rising energy prices and imbalances between supply and demand,” prolonging the country’s economic crisis.