CBRT said the underlying monthly inflation trend "showed a notable decline in June," though it could rise this month.

"Leading indicators suggest that monthly inflation will rise temporarily in July due to adjustments in administered prices and taxes as well as supply-side factors in unprocessed food prices," the committee said in a statement.

"However, the rise in underlying inflation is expected to be relatively limited. Recent indicators confirm that domestic demand, albeit still at inflationary levels, continues to slow down," said CBRT.

The bank pledged to maintain the tight monetary stance "until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range."

The bank last raised interest rates in March this year by 500 basis points.

CBRT said the monetary transmission mechanism will continue to be supported via additional macro-prudential measures, while sterilisation will be implemented effectively by adding to the toolset whenever needed.

Since June last year, the bank has raised its policy rate by 4,150 basis points in a tightening cycle.

The country’s annual inflation rate is projected to drop to 42.95 per cent by the year end—down from the earlier estimate of 43.52 per cent, a recent central bank survey revealed.

Fibre2Fashion News Desk (DS)