Türkiye's central bank keeps policy rate unchanged at 50%

The Central Bank of the Republic of Türkiye (CBRT) announced that it would maintain the policy rate, also known as the one-week repo auction rate, at 50%.

The announcement highlighted that despite the continued weakening of the primary trend in monthly inflation in March, the actual figures were higher than expected.

While the trend in consumption goods and gold imports contributed to the improvement in the current account balance, other indicators for the near term suggested resilience in domestic demand.

The statement also pointed out the high trajectory and rigidity of service inflation, inflation expectations, geopolitical risks, and inflationary pressures from food prices.

Despite deciding to keep the policy rate unchanged, the Committee reiterated its cautious stance against upside risks to inflation, considering the delayed effects of monetary tightening.

CBRT announced that a tight monetary policy stance would be maintained until a significant and permanent decrease in the main trend of inflation is achieved and inflation expectations approach the targeted range.

Deflation expected to be established in the second half of 2024

According to the Central Bank, deflation is expected to be established in the second half of 2024.

CBRT will continue to support the monetary transmission mechanism if there are developments in credit growth and deposit interest rates beyond expectations.

Liquidity developments will be closely monitored, and sterilization tools will be used effectively when necessary.

The statement concluded by reaffirming the commitment to achieving the inflation target of 5% in the medium term and emphasized that all policy decisions will be made within a predictable, data-driven, and transparent framework.

Source: Newsroom