Central Bank of Turkey keeps interest rate on hold at 24 pct

The Central Bank of Turkey’s Monetary Policy Committee decided to keep the one-week repo auction rate on hold at 24 percent today. Lately, the released data indicate that rebalancing trend in the economy has become more noticeable. External demand continues to keep its strength while slowdown in economic activity continues, partially because of tighter financial conditions.

While developments in import prices and domestic demand conditions have led to some rebound in the outlook for inflation, risks on price stability continue to prevail. Accordingly, the Committee has decided to keep the tight monetary policy stance until the outlook of inflation shows a considerable rebound. According to the Committee statement, the central bank will continue to use all available instruments in pursuit of the price stability objective.

Inflation expectations, pricing behaviour, lagged effect of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors impacting inflation would be closely monitored and, if required, additional tightening of the monetary policy would be delivered.