Turkey’s central bank left its key interest rate unchanged for the second straight meeting, despite surging inflation.
The Monetary Policy Committee of the Central Bank of the Republic of Turkey, governed by Sahap Kavcioglu, decided to hold the one-week repo rate at 14.00 percent.
The MPC said the recent increase in inflation has been driven by pricing formations that are not supported by economic fundamentals, supply side factors such as the rise in global energy, food and agricultural commodity prices, supply constraints, and demand developments.
“The Committee expects disinflation process to start on the back of measures taken and decisively pursued for sustainable price and financial stability along with the decline in inflation owing to the base effect,” the bank said in a statement.
“While cumulative impact of the recent policy decisions is being monitored, to create a foundation for sustainable price stability, the comprehensive review of the policy framework is being conducted with the aim of encouraging permanent liraization in all policy tools of the CBRT,” the bank added.
Under pressure from President Tayyip Erdogan, the bank had lowered the rate by 500 basis points since September.
Jason Tuvey, an economist at Capital Economics, said the policy rate is likely to be kept unchanged over the coming months and, if anything, political pressures mean that the next move in rates is more likely to be down than up.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
