MNI CBRT WATCH: Key 1W Repo Rate Cut 250Bps As Expected
MNI (LONDON) - The Central Bank of the Republic of Turkey on Thursday lowered its key 1W Repo rate by 250 basis points to 42.5% as expected, citing February’s decrease in the trend of underlying inflation following January’s “idiosyncratic” increase in service sector prices, while continuing to emphasise its tight monetary policy stance.
“Although domestic demand was above projections in the fourth quarter, it remained at disinflationary levels. Leading indicators suggest that domestic demand remains disinflationary in the first quarter,” the CBRT said in a statement, although it noted that pricing behaviour and inflation expectations remain as sources of upside risk to the outlook. (See MNI EM CBRT WATCH: Feb Data Supports 250Bps Cut, Slowdown Seen)
The Bank repeated its assertion that the tight monetary stance will be maintained “until price stability is achieved via a sustained decline in inflation.” It also added a reference to the additional measures taken since the January decision to “preserve macro financial stability and support the tight monetary policy stance” by further restricting credit growth.