Turkey’s yearly inflation rate has increased to 61.14 percent in March, with the country’s trade deficit surging to 76.7 percent, reaching a new 20-year high, the Turkish Trade Ministry said on 4 April.

In February, Turkey’s inflation rate was at 54.4 percent and in March of last year, it was at 16.19 percent, the Turkish Statistical Institute reported.

According to the data, exports rose 19.8 percent to $22.71 billion in March, while imports rose 31 percent to $30.95 billion.

Turkish Trade Minister, Mehmet Mus, said that a $16.3 billion rise in energy imports in the first three months of the year had caused the rise in total imports.

Last year, the Turkish lira lost more than 44 percent of its value against the dollar, leading to increased inflation in the import-dependent country, and resulting in interest rate cuts.

The Turkish Central Bank (CBRT) cut rates by 5 percent between September and December, but has kept the interest rate at a constant 14 percent this year.

The Russian military operation in Ukraine has caused a drastic increase in global commodity prices, posing a threat to Ankara’s new economic program, which is meant to achieve a current account surplus.

“CBRT policies are just not working in countering inflation … Indeed, I think the overwhelming consensus is that the unorthodox policy settings of the CBRT are a major cause of inflation,” Tim Ash from BlueBay Asset Management said. “The war in Ukraine is just making things that much worse,” he added.

According to a report by the Turkish Statistical Institute on 3 March, the prices of consumer goods rose by nearly five percent while the producer price index soared to seven percent month-on-month in February, leading to an annual rise of 105 percent.

Turkey has been facing runaway inflation over the past nine months since President Recep Tayyip Erdogan pressured the country’s central bank to slash interest rates by 500 basis points. The unorthodox economic program seeks to prioritize growth, investment, and exports while keeping interest rates low.