CBRT Decided Not To Change The Interest Rate In May

CBRT decided not to change the interest rate in May, either. The Central Bank kept the interest rate of 19 percent constant.

The Monetary Policy Committee of the Central Bank of the Republic of Turkey (CBRT) did not change the policy rate at the meeting held today. The interest rate, which was 19 percent, was kept constant this month as well. The estimation of the markets was to keep the policy interest rate constant at 19 percent. In addition, it was stated in the decision text that the current stance in monetary policy will be maintained until a significant decrease in the forecast path included in the inflation report in April is achieved. In the April inflation report, the Central Bank had predicted that inflation would be between 10.0 percent and 14.4 percent at the end of 2021 with a 70 percent probability, with a mid-point of 12.2 percent. Economists pointed out that this message, which refers to the April inflation report, is a message that rate cuts will not be as early as expected. In addition, the decision text said, "Until strong indicators are formed that point to a permanent decline in inflation and reach the medium-term 5 percent target, the policy rate will continue to be set at a level above inflation, in a way that preserves the strong disinflationary effect." On the other hand, attention was drawn to commodity prices in the text of the decision. The text contained the following statements: "The global economy, which contracted sharply in 2020 due to the epidemic, continues to recover with the effect of supportive policies and positive developments in the vaccination process. In this recovery process, especially the manufacturing industry activity and the acceleration in global trade have been decisive. Its effects on international financial markets remain important. "