TURKEY: CBRT Leave Forward Guidance Unchanged, Remains Hawkish

The CBRT left its forward guidance unchanged:

"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 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. Monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen."

Other highlights from the policy statement:

• Indicators for the third quarter suggest that domestic demand continues to slow down with a diminishing inflationary impact.
• The high level of and the stickiness in services inflation, inflation expectations, and geopolitical developments keep inflationary risks alive.
• The disinflation process will gain strength.
• In case of unanticipated developments in credit and deposit markets, monetary transmission mechanism will be supported via additional macroprudential measures […] Sterilization tools will continue to be implemented effectively.

Full policy statement here.