The Central Bank of Türkiye has hiked its policy rate by 500 basis points to 40 percent, much more than market forecasts.

The bank stressed on Thursday that the current level of monetary tightness is significantly close to the level required to establish the disinflation course.

"Accordingly, the pace of monetary tightening will slow down and the tightening cycle will be completed in a short period of time," it said.

According to the latest data from the Turkish Statistical Institute (TurkStat), Türkiye's annual inflation eased to 61.36 percent in October, from a nine-month high of 61.53 percent in September.

At its October meeting, the bank increased its policy interest rate, also known as the one-week repo auction rate, by 500 basis points to 35 percent.

Over the course of six monetary policy meetings, the bank has been gradually increasing the rate from 8.5 percent in May.