MNI CBRT WATCH: Rates Held At 50%, Inflation Seen Trending Down
The Central Bank of Turkey held its policy rate at 50% as expected on Thursday, saying domestic demand continues to slow and that tight policy will weigh on inflation in coming months.
“Considering the lagged effects of the monetary tightening, the Committee decided to keep the policy rate unchanged, but reiterated that it remains highly attentive to inflation risks,” the CBRT said, point to sticky services inflation, fast-rising food prices, elevated inflation expectations and geopolitical risks.
“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,” it said.
The CBRT will also closely monitor liquidity and take further macroprudential measures if necessary, it said, adding that “sterilisation will be implemented effectively by also enriching the toolset whenever needed."
The Monetary Policy Committee also announced that the policy meetings scheduled for July 25 and August 22 have been moved to July 23 and August 20, due to Governor Fatih Karahan’s attendance at the G20 Finance Ministers-Central Bank Governors Meeting and the Jackson Hole Economic Policy Symposium.