Turkish central bank keeps policy rate unchanged at 37
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Güneşli
13 oC
Güneşli
The Monetary Policy Committee (MPC) of the Central Bank of the Republic of Türkiye (CBRT) decided on Thursday to maintain its key policy rate at 37 percent, leaving borrowing costs unchanged as it continues its tight monetary policy stance to combat inflation.
The Committee also kept the overnight lending rate at 40 percent and the overnight borrowing rate at 35.5 percent.
In its post-meeting statement, the CBRT noted that the underlying trend of inflation, which had risen in the early months of the year and further increased in April partly due to higher energy prices, eased slightly in May.
However, it highlighted ongoing volatility in energy prices amid geopolitical developments and uncertainties.
“First quarter data point to a slowdown in economic activity, and leading indicators suggest a continued weak course in domestic demand,” the statement said.
The Bank reiterated that its tight monetary policy will be maintained until price stability is achieved, emphasizing that this stance is expected to support the disinflation process through demand, exchange rate, and expectation channels.
“The Committee will determine the policy rate by taking into account realized and expected inflation and its underlying trend in a way to ensure the tightness required by the projected disinflation path,” the MPC stated. It added that decisions will continue to be made on a meeting-by-meeting basis with a strong focus on the inflation outlook.
The Central Bank warned that it remains highly attentive to upside risks on inflation and stands ready to tighten policy further in case of a significant and persistent deterioration in the inflation outlook.
Regarding the medium-term target, the MPC reaffirmed its commitment to creating the necessary monetary and financial conditions to reach the 5 percent inflation target.
The Committee also noted it will closely monitor liquidity conditions and credit markets, ready to deploy additional macroprudential measures if needed to support the monetary transmission mechanism.
The full summary of the Monetary Policy Committee Meeting is expected to be released within five working days. (ILKHA)
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