Yearly inflation in Turkey hit 61.14% in March, the country's statistical authority said on Monday, climbing to a new 20-year high.

The figure was 54.4% in the previous month and 16.19% in March 2021, according to the Turkish Statistical Institute (TurkStat).

The highest annual price increase last month was seen in transportation with 99.12%, followed by food and nonalcoholic beverages at 70.33% and furnishing and household equipment at 69.26%.

The lowest annual increases were posted by communication with 15.08%, education with 26.73%, and clothing and footwear with 26.95%.

Rising prices are part of an economic crisis exacerbated by the COVID-19 pandemic. Meanwhile, Russia’s invasion of Ukraine has seen a surge in gas, oil and grain prices.

Turkey’s runaway inflation also follows a series of interest rate cuts late last year.

The central bank cut rates by 5 percentage points between September and December, but they have remained unchanged at 14% this year.

The lira, which lost 44% of its value against the U.S. dollar last year, plunged to a record low of 18.41 against the greenback in December before the government revealed a currency protection scheme to boost national assets.

In an effort to soften the blow on households, the government has also implemented tax cuts on basic goods and has adjusted electricity tariffs.

Meanwhile, Treasury and Finance Minister Nureddin Nebati on Monday said that they are taking decisive steps to "permanently reduce inflation, which rose to 61.1% as of March, and to maintain price stability in a sustainable way."

The minister was speaking at a business meeting in the northwestern Turkish city of Bursa.

The country's monthly inflation rate was 5.46% in March, up from 4.81% in February.

The highest monthly increase was 13.29% in transportation among the main groups, while clothing and footwear posted the lowest inflation with 1.78%, according to TurkStat.

A group of 15 economists projected an average annual rise of 60.95% in consumer prices in March, an Anadolu Agency (AA) survey found last week.

Stating that the world economy, which has been facing an extraordinary period due to the pandemic over the last two years, has been shaken once again by the Russia-Ukraine war, the finance minister noted that the economic effects of the war, as well as its tragic individual and social effects, have affected the whole world.

The supply problems, especially in agricultural and energy products, increase the inflationary pressure on the countries, Nebati said, expressing his hope for peace to be established between the two countries as soon as possible as a result of negotiation meetings Turkey hosted under the leadership of President Recep Tayyip Erdoğan.

Nebati drew attention to the fact that the biggest problem of the world economies in the last period is the increasing inflation.

"In Turkey, particularly the temporary effects of pricing formations that are far from economic fundamentals, the increase in global energy, food and agricultural commodity prices, supply-side factors and demand developments such as disruptions in the supply process are affecting the rise of inflation," he said.

"We are taking decisive steps to reduce the prices and ensure price stability in a sustainable way. For this purpose, we have eliminated the volatility in exchange rates in a short time with the Currency Protected Deposit and Participation Accounts and by offering various financial instruments," the minister emphasized.

Nebati explained that they saw the clearest and strongest effect of the Currency Protected Deposit when the exchange rate remained stable despite the Russia-Ukraine war, the rise in oil prices and the Federal Reserve's (Fed) decision to increase interest rates.

Reiterating that the first participants of the currency protection scheme system have started to receive returns after the maturities expired on March 23, Nebati noted that the balance of the Currency Protected Deposits, which was TL 596 billion on that date, had reached TL 695 billion as of April 1.

"Stability was achieved in the exchange rate, which is one of the most important determinants of inflation, within free-market conditions. With the steps we will take, we will see that inflation will reach a reasonable level by the end of the year," he said.