The central bank of Turkey increased today, for the second month in a row, its key interest rate by 250 basis points from 15% to 17.5%to prevent a further rise in inflation.

“Monetary tightening will be progressively strengthened (…) if necessary, until the inflation outlook significantly improves”the central bank says in its announcement.

The new increase was expected and is announced the day after Turkish President Tayyip Erdogan’s tour of the Gulf states, where he signed a series of deals worth, according to some analysts, $100 billion.

The key rate hike is under the signature of Turkey’s new economic staff that took office after Erdogan was re-elected in late May, despite being a devotee of low interest rates.

Against you an inflation close to 40% and the financial crisis, the turkish president temporarily agrees to the interest rate hike.

But this increase, lower than expected by some investors, shows that the president of Turkey is not giving freedom of movement to the new governor of the central bank Hafiz Gage Erkan and to the minister of economy Mehmet Sisek, according to the analysts.

“Very bad decision”, comments Timothy Ash, an economist at BlueBay Asset Management, who sees it as confirming observers who believe that the minister and the head of the central bank “they have no real mandate to carry out the tightening of monetary policy.”

“An interest rate at 17.5% when inflation is running at 40% and rising is insufficient”says the economist, who considers that “the pound will be sorely tested.”