CBRT Say Year-End Inflation Expectations Have Increased

Highlights from the CBRT's March meeting summary:

• In response to the deterioration in the inflation outlook, the Committee decided to raise the policy rate. 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.
• Market liquidity will be closely monitored and sterilization tools will continue to be effectively used whenever needed.
• While the decline in medium term inflation expectations continues, year-end inflation expectations for 2024 and 2025 have increased.
• The increase in consumer inflation for February was mainly driven by services prices affected by the ongoing consequences of wages and backward-indexation behavior, as well as food prices influenced by factors specific to the month of Ramadan.
• Turkish lira commercial loan rates and general-purpose loan rates (excluding overdraft accounts) increased by 6.27 percentage points and 15.3 percentage points to 59.6% and 76.0%, respectively, since the previous MPC meeting.

See the full document here.