The Central Bank reduced the one-week repo auction interest rate (policy rate) by 75 basis points from 12 percent to 11.25 percent.
The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (PPK) reduced the one-week repo auction interest rate (policy rate) by 75 basis points from 12 percent to 11.25 percent.
In the announcement made by the CBRT regarding the interest rates, it was stated that the MPC, convened under the chairmanship of the Central Bank Governor Murat Uysal, decided to reduce the policy interest rate from 12 percent to 11.25 percent.
In the announcement, it was stated that recent data show that the recovery trend in economic activity continues.
In the announcement, it was stated that although the improvement in the sectoral spread of economic activity continues, the weak course of investments continues, and the following was noted:
“While the positive impact of the developments in competitiveness continues, the weakening in the global growth outlook partially slows down foreign demand. While the contribution of net exports to growth is decreasing, it is predicted that the recovery in the economy will continue with the disinflation process and the improvement in financial conditions. The current account balance, which has recently achieved a significant improvement, will continue to increase in the coming period with the contribution of the measures taken. It is expected to follow a moderate course.
The weak course of global economic activity and the low level of global inflation strengthen the expectations that the central banks of developed countries will continue their expansionary monetary policies. Current global financial conditions and the recent partial improvement in expectations regarding global trade support the demand and risk appetite for developing country financial assets. “In addition, the effects of protectionist measures, other uncertainties regarding global economic policies and geopolitical developments through capital flows, foreign trade and commodity prices are closely monitored.”
“The current monetary policy stance remained compatible with the targeted disinflation path.”
In the announcement, it was stated that the improvement in the inflation outlook continues and the general improvement in inflation expectations continues.
In the announcement, it was stated that the improvement in macroeconomic indicators, especially inflation, supported the decrease in the country risk premium and contributed to limiting the pressures on cost elements, and it was reported that the trends of core inflation indicators remained moderate depending on the developments in the exchange rate, domestic demand conditions and producer prices.
In the announcement, it was evaluated that the course of inflation was largely compatible with the year-end forecast.
In this context, the announcement emphasized that the Board decided to make a measured reduction in the policy rate, taking into account all factors affecting the inflation outlook.
“At this point, it is evaluated that the current monetary policy stance remains compatible with the targeted disinflation path. The Board evaluates that the continuity of the disinflation process is of great importance in terms of the decline in the country risk premium, the decline in long-term interest rates and the strengthening of the recovery in the economy. The decline in inflation is in line with the targeted path.” “For this to happen, the cautious stance in monetary policy must be maintained. In this context, the monetary stance will be determined to ensure the continuity of the decline in inflation, taking into account the indicators of the main trend. The Central Bank will continue to use all the tools at its disposal in line with the objectives of price stability and financial stability.”
In the announcement, it was emphasized that any new data and news to be announced may cause the Board to change its policy stance for the future, and it was stated that the MPC Meeting Summary will be published within five business days.
Source: https://www.aa.com.tr/tr/ekonomi/merkez-bankasi-politika-faizini-yuzde-11-25e-indirdi/1704671
