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TURKEY: CBRT Maintain Familiar Hawkish Guidance, Liquidity Conditions Monitored

TURKEY

Little in the way of new guidance in the policy statement. Highlights below:

  • 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.
  • Leading indicators suggest that monthly inflation will rise temporarily in July due to adjustments in administered prices and taxes as well as supply-side factors in unprocessed food prices, which are relatively beyond the control of monetary policy.
  • However, the rise in the underlying inflation is expected to be relatively limited.
  • Liquidity conditions are assessed with respect to prospective developments and closely monitored.

Full statement here.

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