Breaking News: CBRT Did Not Change Policy Rate

According to the breaking news, the CBRT did not change its policy rate. The Central Bank of the Republic of Turkey left the policy rate unchanged at 17 percent.

The Central Bank of the Republic of Turkey Monetary Policy Committee announced its interest rate decision. No interest rate change decision was made in the MPC meeting held today and the policy rate was kept fixed at 17 percent. Not negating the expectations of the markets, the CBRT repeated the phrase "tight stance will continue for a long time" in the decision text and noted that additional tightening could be made if necessary. In the decision text of the CBRT, it was stated that the negative impact of domestic demand, which gained strength due to the cumulative effect of high credit growth, on the current account balance, however, it was pointed out that credit growth has slowed down due to the tightening in financial conditions recently. In the text, it was noted that domestic demand conditions, cumulative cost effects, especially the exchange rate, the rise in international food and other commodity prices, and high levels of inflation expectations continue to adversely affect pricing behavior and inflation outlook. In addition, it was emphasized that the ongoing upward trend in international commodity prices and the supply constraints in some sectors and wage and administered price adjustments maintain their importance on the medium-term inflation outlook. Commerzbank Emerging Markets Senior Economist Tatha Ghose said the following on the subject: “The decline in CDS showed us that the markets are more confident in new policies. I can say that this will continue for a few months, but then we need to see how President Erdogan will behave in relation to high interest rates. If inflation does not decline soon, President Erdogan may blame the high interest rates.”   "Tight Stance Will Continue for a Long Time" The CBRT repeated its statement that the tight monetary policy stance will be resolutely maintained for a long time until strong indicators are formed that point to a permanent decline in inflation and price stability, following the evaluations regarding inflation. In addition to these, while emphasizing the additional tightening policy, the following statements were used: "Within the scope of strong indicators that point to a permanent decline in inflation and price stability, indicators of the underlying trend of inflation and pricing behavior, diffusion indices, demand and cost factors, and inflation expectations are closely monitored within the forecast horizon. Additional monetary tightening will be made if necessary."