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Turkey’s inflation rate hits highest level since 1998

Yahoo Finance's Brian Cheung explains a chart showing Turkey's inflation rate has exploded.

Video transcript

BRIAN CHEUNG: Well, time now for our Chart of the Day and we are talking about inflation, well, in Turkey where it's ballooned to, get this, 80% year over year. And this as the central bank made the surprise decision to cut interest rates from 14% to 13%, which by the way, is the opposite of what you usually do when inflation as high as we've seen the Fed and other central banks do. And by the way, this has sent the Turkish lira actually slipping against the US dollar.

We've seen pretty quick appreciation after that announcement from the Turkish central bank. So Akiko, as we again, talk about inflation here, look, we've got 8.5% year over year here in the United States. It could always, I guess, be a lot worse.

AKIKO FUJITA: Yeah, I mean, those who've been following the story out in Turkey would argue, right, that this is not necessarily a surprise. I mean President Tayyip Erdogan has made the argument consistently that, actually, rate-- that cutting rates is what tames inflation. Nothing has proven out to be the case.

But certainly, Turkey, their inflation rate accelerated by a lot of things that we've seen globally. Obviously, what's happening in Russia and between Russia and Ukraine. You know, price pressures building as well, but 80%.

BRIAN CHEUNG: There have been Turkish central bankers who have argued for the opposite-- we need to raise rates. And what happened to them?

AKIKO FUJITA: They all got cut.

BRIAN CHEUNG: They got the boot so.