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MNI CBRT WATCH: Turkish Cenbank Set To Hold, Stress Vigilance

(MNI) LONDON

Central Bank of Turkey expected to keep policy rate at 50% with steep inflation fall seen in H2, but expectations remain a risk

Turkey’s central bank is expected to hold its policy rate at 50% for a second time on Thursday, while stressing that it remains ready to raise rates again should inflation expectations deteriorate significantly and persistently.

The CBRT raised its target inflation rate for 2024 from 36% to 38% earlier this month, with inflation at 68.9% in April and set to peak close to 75% in the coming weeks, though former deputy governor Fatih Ozatal told MNI recently that prudential changes contributing to tighter financing conditions, an improving current account balance and a stable currency should help inflation end the year inside the tolerance band. (See MNI EM INTERVIEW: CBRT On Track To Hit Target- Ex-Deputy Governor)

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Turkey’s central bank is expected to hold its policy rate at 50% for a second time on Thursday, while stressing that it remains ready to raise rates again should inflation expectations deteriorate significantly and persistently.

The CBRT raised its target inflation rate for 2024 from 36% to 38% earlier this month, with inflation at 68.9% in April and set to peak close to 75% in the coming weeks, though former deputy governor Fatih Ozatal told MNI recently that prudential changes contributing to tighter financing conditions, an improving current account balance and a stable currency should help inflation end the year inside the tolerance band. (See MNI EM INTERVIEW: CBRT On Track To Hit Target- Ex-Deputy Governor)

Keep reading...Show less