Turkish central bank keeps policy rate constant at 50%

28 Jun '24

1 min read

Turkish central bank keeps policy rate constant at 50%

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Insights

Considering the lagged effects of monetary tightening, the Turkish central bank decided to keep the policy rate constant at 50 per cent, staying highly attentive to inflation risks.
Domestic demand, still at inflationary levels, continues to slow down.
Policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen.

Considering the lagged effects of monetary tightening, the Turkish central bank’s (TCMB) monetary policy committee yesterday decided to keep the policy rate, i.e, the one-week repo auction rate, constant at 50 per cent, but reiterated that it remains highly attentive to inflation risks.

The decline in the underlying trend of monthly inflation registered a temporary pause in May. The central bank has a 5-per cent inflation target in the medium term.

Recent indicators confirm that domestic demand, albeit still at inflationary levels, continues to slow down.

The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range, a TCMB release said.

Monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen.

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