CBRT Cuts The Interest Rate
CBRT cuts the interest rate. The Central Bank of the Republic of Turkey lowered the policy interest rate from 18 percent to 16 percent.
The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee cut the policy rate from 18 percent to 16 percent. The market’s expectation was that the interest rate would be cut by 50 basis points.
In the text of the Central Bank’s decision, the recent rise in inflation; It was underlined that supply-side factors such as increases in import prices, especially in food and energy, and disruptions in supply processes, increases in administered/directed prices and demand developments due to opening were effective.
Evaluating that these effects were caused by accidental factors, the CBRT emphasized that the slowdown effects of strong monetary tightening on loans and domestic demand continued.
Stating that the tight monetary stance began to have a contractionary effect on commercial loans beyond the anticipated, the CBRT also noted that the positive effects of the strengthened macroprudential policy framework for retail loans to return to a moderate course began to be observed.
The CBRT stated that it evaluated the analyzes on the decomposition of demand factors that can be affected by monetary policy, core inflation developments and the effects of supply shocks, and within this framework, the policy rate was cut by 200 basis points and determined as 16 percent.
In addition to these, the CBRT evaluated that there was limited room until the end of the year for the downward correction in the policy rate due to supply-side incidental factors.