Turkey’s central bank has decided to increase its main interest rate to 40% in order to tackle the country’s high inflation. This move is part of a bigger plan to deal with the problem of prices going up too fast. Inflation in Turkey reached 61.36% in October and is expected to keep rising, reaching its highest point at around 70 to 75% in May next year. While central banks in other countries have been raising interest rates to fight inflation, President Recep Tayyip Erdogan used to argue against this, saying that higher rates would make prices go up even more. However, since he was re-elected in May, he has changed his mind.
The new head of the central bank, Hafize Gaye Erkan, has been given the power to raise interest rates significantly, from 8.5% to 40%, in order to make borrowing money more expensive and slow down the rate at which prices are going up. The central bank has said that it will gradually slow down the pace of increasing interest rates and finish this process in a short amount of time. They have also made it clear that interest rates will stay high for as long as necessary to make sure prices stay stable.
Turkey’s economy grew quickly in the early years of President Erdogan’s leadership, but it has faced challenges recently. The central bank’s previous policy of lowering interest rates even though inflation was high caused a currency crisis in 2021. As a result, the government put a plan in place to protect people’s money in Turkish lira from losing value.
All in all, the decision to raise interest rates to 40% is a big step towards dealing with Turkey’s high inflation. It shows that President Erdogan has changed his mind about interest rates and now understands that action needs to be taken to make prices stable. The new head of the central bank has the power to make these changes and it is expected that the process of raising interest rates will be finished soon.
Original news source: Turkey’s central bank raises interest rates to 40% (BBC)
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Group or Classroom Activities
Warm-up Activities:
– News Summary
Instructions: Divide the students into pairs or small groups. Give each group a few minutes to read the article. Then, ask each group to summarize the main points of the article in their own words. Encourage them to include key information such as the reason for the interest rate increase, the current inflation rate in Turkey, and the change in President Erdogan’s stance on interest rates.
– Opinion Poll
Instructions: Ask the students to form small groups. Provide them with a list of discussion questions related to the article, such as “Do you think raising interest rates is an effective way to tackle inflation?” or “What impact do you think high inflation has on a country’s economy?” In their groups, students should discuss the questions and gather opinions from each member. After the discussion, have each group share their findings with the class.
– Vocabulary Pictionary
Instructions: Write a list of key vocabulary words from the article on the board, such as “inflation,” “interest rates,” and “currency crisis.” Divide the students into teams and give each team a set of blank paper and markers. One student from each team will come to the front of the class and choose a word from the list. They must then draw a picture to represent the word while their team tries to guess what it is. The team that guesses correctly earns a point.
– Pros and Cons
Instructions: Divide the students into two groups. Assign one group to discuss the pros of raising interest rates to tackle inflation, and the other group to discuss the cons. Give the students a few minutes to brainstorm their points. Then, have each group present their arguments to the class, allowing for a short rebuttal from the opposing group after each presentation. Encourage the students to use evidence from the article to support their points.
– Future Predictions
Instructions: Ask the students to imagine they are economic analysts. In pairs or small groups, have them discuss and make predictions about the future of Turkey’s economy based on the decision to raise interest rates. They should consider factors such as the impact on inflation, the stability of prices, and the overall economic growth. After the discussion, have each group share their predictions with the class and explain their reasoning.
Comprehension Questions:
1. Why did Turkey’s central bank decide to increase its main interest rate to 40%?
2. What is the purpose of raising interest rates in Turkey?
3. What was President Erdogan’s previous stance on raising interest rates?
4. Why has President Erdogan changed his mind about interest rates?
5. How much did inflation in Turkey reach in October?
6. What is the expected highest point of inflation in Turkey next year?
7. Who is the new head of the central bank in Turkey?
8. What is the plan for gradually decreasing the pace of increasing interest rates in Turkey?
Go to answers ⇩
Listen and Fill in the Gaps:
Turkey’s central bank has decided to increase its main interest rate to 40% in (1)______ to tackle the country’s high inflation. This move is part of a bigger plan to deal with the problem of prices (2)______ up too fast. Inflation in Turkey (3)______ 61.36% in October and is expected to keep (4)______, reaching its highest point at around 70 to 75% in May next year. While central banks in other countries have been raising interest rates to fight inflation, President Recep Tayyip Erdogan used to argue against this, saying that higher rates would make (5)______ go up even more. However, since he was re-elected in May, he has changed his mind.
The new head of the (6)______ bank, Hafize Gaye Erkan, has been given the power to raise (7)______ rates significantly, from 8.5% to 40%, in order to make borrowing (8)______ more expensive and slow down the rate at which prices are going up. The central bank has said that it will gradually slow down the pace of increasing interest rates and finish this process in a short amount of time. They have also made it (9)______ that interest rates will stay high for as long as necessary to make sure prices stay stable.
Turkey’s economy grew quickly in the early (10)______ of (11)______ Erdogan’s leadership, but it has faced challenges recently. The central bank’s previous policy of lowering interest rates even though inflation was high caused a currency crisis in 2021. As a (12)______, the government put a plan in place to protect people’s money in Turkish lira from (13)______ value.
All in all, the decision to raise interest (14)______ to 40% is a big step towards dealing with Turkey’s high inflation. It shows that President Erdogan has changed his mind about interest rates and now understands that action (15)______ to be taken to make prices stable. The new head of the central bank has the power to make these changes and it is (16)______ that the process of raising interest rates will be finished soon.
Go to answers ⇩
Discussion Questions:
Students can ask a partner these questions, or discuss them as a group.
1. What is inflation and why is it a problem?
2. How do you think increasing interest rates can help control inflation?
3. Do you think it was a good decision for Turkey’s central bank to raise interest rates to 40%? Why or why not?
4. How would you feel if prices in your country were increasing very quickly?
5. Do you think President Erdogan made the right decision by changing his mind about interest rates? Why or why not?
6. How do you think raising interest rates will affect borrowing money and loans?
7. What challenges do you think Turkey’s economy has been facing recently?
8. What do you think caused the currency crisis in Turkey in 2021?
9. How important do you think it is for a country’s central bank to have the power to make changes to interest rates?
10. Do you think it is necessary for interest rates to stay high for a long time to ensure price stability? Why or why not?
11. How do you think the decision to raise interest rates will affect the average person in Turkey?
12. Have you ever experienced a situation where prices were increasing too fast? How did it affect you?
13. Do you think other countries should also raise their interest rates to control inflation? Why or why not?
14. How do you think the process of raising interest rates should be managed? Gradually or quickly?
15. What do you think will happen to Turkey’s economy in the future as a result of raising interest rates?
Individual Activities
Vocabulary Meanings:
Match each word to its meaning.
Words:
1. inflation
2. interest rates
3. borrowing
4. stable
5. currency
6. crisis
7. process
8. gradually
Meanings:
(a) Not changing or moving
(b) The type of money used in a country
(c) The cost of borrowing money
(d) A time of great difficulty or danger
(e) When prices go up too fast
(f) Slowly and steadily over a period of time
(g) A series of actions or steps to achieve a goal
(h) Taking money from someone with the promise to pay it back later
Go to answers ⇩
Multiple Choice Questions:
1. Why did Turkey’s central bank increase its main interest rate to 40%?
(a) To tackle high inflation
(b) To encourage borrowing money
(c) To stimulate economic growth
(d) To stabilize the currency
2. What was Turkey’s inflation rate in October?
(a) 40%
(b) 61.36%
(c) 8.5%
(d) 70 to 75%
3. What was President Erdogan’s previous stance on raising interest rates?
(a) He supported it
(b) He had no opinion
(c) He was undecided
(d) He argued against it
4. Who has the power to raise interest rates significantly in Turkey?
(a) The President
(b) The government
(c) The new head of the central bank
(d) The Turkish people
5. What was the consequence of the central bank’s previous policy of lowering interest rates?
(a) Economic growth
(b) A currency crisis in 2021
(c) Stable prices
(d) Increased borrowing
6. What is the central bank’s plan for interest rates in the future?
(a) Keeping rates at 40% indefinitely
(b) Lowering rates to stimulate borrowing
(c) Raising rates even higher
(d) Gradually slowing down the pace of increasing rates
7. How did Turkey’s economy perform in the early years of President Erdogan’s leadership?
(a) It grew quickly
(b) It declined rapidly
(c) It remained stable
(d) It experienced a recession
8. What does the decision to raise interest rates to 40% show about President Erdogan’s stance on interest rates?
(a) He still believes higher rates will make prices go up more
(b) He has no opinion on interest rates
(c) He has changed his mind and now supports higher rates
(d) He wants to lower interest rates further
Go to answers ⇩
True or False Questions:
1. The new head of the central bank, Hafize Gaye Erkan, has been given the power to significantly decrease interest rates from 8.5% to 40%.
2. Inflation in Turkey reached 61.36% in October and is expected to decrease.
3. Turkey’s central bank has decreased its main interest rate to 40% to address high inflation.
4. Raising interest rates to 40% is seen as a significant step in addressing Turkey’s high inflation, and it is expected to be completed soon.
5. The central bank plans to gradually slow down the pace of increasing interest rates and finish the process quickly.
6. Interest rates will remain low for as long as necessary to ensure price stability.
7. The country’s president, Recep Tayyip Erdogan, used to argue against raising interest rates to fight inflation but has since changed his mind.
8. Turkey’s economy faced challenges recently due to the central bank’s previous policy of lowering interest rates despite high inflation.
Go to answers ⇩
Write a Summary:
Write a summary of this news article in two sentences.
Writing Questions:
Answer the following questions. Write as much as you can for each answer.
1. Why did Turkey’s central bank decide to increase its main interest rate to 40%?
2. What is the problem that Turkey is facing with regards to inflation?
3. What was President Erdogan’s previous stance on raising interest rates?
4. Who is the new head of the central bank and what power has she been given?
5. What challenges has Turkey’s economy faced recently?
Answers
Comprehension Question Answers:
1. Why did Turkey’s central bank decide to increase its main interest rate to 40%?
– Turkey’s central bank decided to increase its main interest rate to 40% in order to tackle the country’s high inflation.
2. What is the purpose of raising interest rates in Turkey?
– The purpose of raising interest rates in Turkey is to make borrowing money more expensive and slow down the rate at which prices are going up.
3. What was President Erdogan’s previous stance on raising interest rates?
– President Erdogan used to argue against raising interest rates, saying that higher rates would make prices go up even more.
4. Why has President Erdogan changed his mind about interest rates?
– President Erdogan has changed his mind about interest rates because he now understands that action needs to be taken to make prices stable.
5. How much did inflation in Turkey reach in October?
– Inflation in Turkey reached 61.36% in October.
6. What is the expected highest point of inflation in Turkey next year?
– The expected highest point of inflation in Turkey next year is around 70 to 75%.
7. Who is the new head of the central bank in Turkey?
– The new head of the central bank in Turkey is Hafize Gaye Erkan.
8. What is the plan for gradually decreasing the pace of increasing interest rates in Turkey?
– The plan is to gradually slow down the pace of increasing interest rates and finish this process in a short amount of time.
Go back to questions ⇧
Listen and Fill in the Gaps Answers:
(1) order
(2) going
(3) reached
(4) rising
(5) prices
(6) central
(7) interest
(8) money
(9) clear
(10) years
(11) President
(12) result
(13) losing
(14) rates
(15) needs
(16) expected
Go back to questions ⇧
Vocabulary Meanings Answers:
1. inflation
Answer: (e) When prices go up too fast
2. interest rates
Answer: (c) The cost of borrowing money
3. borrowing
Answer: (h) Taking money from someone with the promise to pay it back later
4. stable
Answer: (a) Not changing or moving
5. currency
Answer: (b) The type of money used in a country
6. crisis
Answer: (d) A time of great difficulty or danger
7. process
Answer: (g) A series of actions or steps to achieve a goal
8. gradually
Answer: (f) Slowly and steadily over a period of time
Go back to questions ⇧
Multiple Choice Answers:
1. Why did Turkey’s central bank increase its main interest rate to 40%?
Answer: (a) To tackle high inflation
2. What was Turkey’s inflation rate in October?
Answer: (b) 61.36%
3. What was President Erdogan’s previous stance on raising interest rates?
Answer: (d) He argued against it
4. Who has the power to raise interest rates significantly in Turkey?
Answer: (c) The new head of the central bank
5. What was the consequence of the central bank’s previous policy of lowering interest rates?
Answer: (b) A currency crisis in 2021
6. What is the central bank’s plan for interest rates in the future?
Answer: (d) Gradually slowing down the pace of increasing rates
7. How did Turkey’s economy perform in the early years of President Erdogan’s leadership?
Answer: (a) It grew quickly
8. What does the decision to raise interest rates to 40% show about President Erdogan’s stance on interest rates?
Answer: (c) He has changed his mind and now supports higher rates
Go back to questions ⇧
True or False Answers:
1. The new head of the central bank, Hafize Gaye Erkan, has been given the power to significantly decrease interest rates from 8.5% to 40%. (Answer: False)
2. Inflation in Turkey reached 61.36% in October and is expected to decrease. (Answer: False)
3. Turkey’s central bank has decreased its main interest rate to 40% to address high inflation. (Answer: False)
4. Raising interest rates to 40% is seen as a significant step in addressing Turkey’s high inflation, and it is expected to be completed soon. (Answer: True)
5. The central bank plans to gradually slow down the pace of increasing interest rates and finish the process quickly. (Answer: True)
6. Interest rates will remain low for as long as necessary to ensure price stability. (Answer: False)
7. The country’s president, Recep Tayyip Erdogan, used to argue against raising interest rates to fight inflation but has since changed his mind. (Answer: True)
8. Turkey’s economy faced challenges recently due to the central bank’s previous policy of lowering interest rates despite high inflation. (Answer: True)
Go back to questions ⇧
