Central Bank announced its interest rate decision

The Monetary Policy Board of the Central Bank of the Republic of Turkey convened under the chairmanship of President Yaşar Fatih Karahan.

The Board reduced the one-week repo auction interest rate, which is the policy rate, by 1 point from 37 percent to 36 percent. The Board also reduced the Central Bank's overnight lending interest rate from 40 percent to 39 percent, and its overnight borrowing interest rate from 35.5 percent to 34.5 percent.

Despite monthly fluctuations, recent inflation realizations and leading indicators confirm the decline in the main trend. Data on economic activity and the limited reflection of supply shocks on domestic prices show that the weak course of domestic demand continues. On the other hand, the upward risks posed by high energy prices on the inflation outlook as a result of geopolitical tensions that remain vibrant continue. The effects of geopolitical developments on the inflation outlook through the cost channel, economic activity and expectation channel are closely monitored.

The tight monetary policy stance that will be maintained until price stability is achieved will strengthen the disinflation process through demand, exchange rate and expectation channels. The steps to be taken by the Board regarding the policy rate; It will determine inflation realizations, taking into account its main trend and expectations, in line with the intermediate targets and in a way that will ensure the stringency required by disinflation. The size and timing of the steps will be determined with a meeting-based and cautious approach focused on the inflation outlook. In case of a significant and permanent deterioration in the inflation outlook, the monetary policy stance will be tightened. The Board emphasized its cautious stance against upside risks to inflation.

In case of unforeseen developments in the credit and deposit markets, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity conditions will continue to be closely monitored and liquidity management tools will continue to be used effectively. The Board will determine policy decisions to ensure monetary and financial conditions that will enable inflation to reach the 5 percent target in the medium term. The Board will make its decisions in a predictable, data-driven and transparent framework. Summary of the Monetary Policy Committee Meeting will be published within five business days.

Source: TRT Haber Ekonomi RSS (Open Press / Translated Full Text)