Turkish policy has undergone Uturn since May elections
Policy rate raised by 2,650 basis points since June
Annual inflation climbed to 61.5 in September
Bank says it ready to tighten further as needed

ISTANBUL, Oct 26 Reuters Turkey39;s central bank raised its policy rate by 500 basis points to 35 as expected on Thursday, tightening aggressively for a third straight month as it steps up efforts to rein in inflation that has soared for years.

The bank39;s policy committee repeated it is ready to raise rates further as needed to curb inflation, which climbed to an annual rate of 61.53 in September and is expected to rise into next year.

The oneweek policy repo rate has risen by 2,650 basis points since June and most analysts anticipate the central bank CBRT will tighten further in order to narrow the gap with inflation.

Bang on the consensus. The CBRT delivers again. It feels like we will see another two 500bps hikes now to year end, with policy rates likely ending at 45, said Timothy Ash, senior strategist at BlueBay Asset Management.

The central bank said it decided to continue the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behaviour.

The lira weakened slightly to 28.156 against the dollar after the announcement. It has weakened some 70 in two years, largely due to President Tayyip Erdogan39;s longstanding opposition to high rates…