CBRT Kept The Interest Rate Constant

The CBRT kept the interest rate constant. The policy rate, which was 19 percent, remained the same this month.

The Central Bank of the Republic of Turkey (CBRT) kept the policy rate unchanged at 19 percent, in line with market expectations. The messages in the text of the resolution that the current tight stance will be maintained with determination and that the policy rate will continue to be formed on inflation also remained unchanged. In addition, it was underlined that the interest rate would continue to be formed on inflation. Regarding the subject in the text stated, "The policy rate will continue to be set at a level above inflation while maintaining the strong disinflationary effect until strong indicators pointing to a permanent decline in inflation occur and the medium-term 5 percent target is reached." While it was stated in the resolution text that the slowing effects of monetary tightening on loans and domestic demand were observed, taking into account the high levels of inflation and inflation expectations, the message was reiterated that the current tight stance in monetary policy would be maintained decisively until a significant decrease in the Inflation Report estimation path is achieved. Regarding the inflation outlook in the text, it is stated that demand conditions, supply constraints in some sectors, volatilities that may be seen in inflation in the summer months due to the opening and high inflation expectations continue to pose risks on the pricing behavior and inflation outlook, as well as the recent increases in import prices and administered/directed prices.