Recent political events in Turkey (arrest of Imamoglou, turmoil) prevented inflation from slowing down and the impact affected the economy as well as foreign stocks, the head of the European Bank of Reconstruction (EBRD) said.

The arrest of the Mayor of Constantinople and the opposition leader on March 19, caused a sharp fall In the Turkish pound and triggered upheaval on the market, leading the central bank to an unexpected increase in interest rates in April and short -circuit a relaxation cycle that began early in the year.

Turkey was on a “slow but steady” course towards reducing inflation before the event, EBRD chief economist Beata Yavorsik told Reuters.

“This course allowed her to reduce interest rates, but this process has stopped from recent political events, which brought up turmoil and forced the central bank to change direction,” Yavorsik said, adding that the increase in interest rates put a brake on the economy.