20.08.2024 14:10
The Central Bank kept its policy rate unchanged at 50 percent, in line with expectations. The Central Bank's decision statement included the following statement: "A tight monetary policy stance will be maintained until a significant and lasting decrease is achieved in the core trend of monthly inflation and inflation expectations approach the targeted range."
The Central Bank kept the policy rate at 50 percent. Economists were certain that the interest rate would be kept at 50 percent. Thus, the policy rate remained unchanged for the fifth consecutive month.
INFLATION EMPHASIS
In a statement from the CBRT, it was stated that "while the monthly inflation trend in July increased slightly compared to the previous month, it remained below the average of the second quarter. Indicators for the third quarter suggest that domestic demand continues to slow down, indicating a decrease in its inflationary effect. While goods inflation is decreasing, it is evaluated that the improvement in service inflation will be delayed. The high level and rigidity in service inflation, inflation expectations, and geopolitical developments keep inflationary risks alive. The Board emphasized that the relative importance of the alignment of inflation expectations and pricing behaviors with the forecasts has increased in terms of the disinflation process.
The stable stance in monetary policy will reduce the main trend of monthly inflation and strengthen the disinflation process through rebalancing in domestic demand, real appreciation of the Turkish lira, and improvement in inflation expectations. The Board, taking into account the delayed effects of monetary tightening, decided to keep the policy rate unchanged, while reiterating its cautious stance against upward risks on inflation. The tight monetary policy stance will be maintained until a significant and permanent decrease is achieved in the main trend of monthly inflation and inflation expectations approach the target range. In the event of a significant and permanent deterioration in inflation, the monetary policy stance will be tightened.
If there are developments in credit and deposit markets that are different from those expected, the monetary transmission mechanism will be supported with additional macroprudential measures. Liquidity conditions will be closely monitored considering possible developments. Sterilization tools will continue to be used effectively.
The Board will determine the monetary and financial conditions that will reduce the main trend of inflation and achieve the inflation target of 5 percent in the medium term, taking into account the delayed effects of monetary tightening.
Indicators regarding inflation and the main trend of inflation will be closely monitored, and the Board will use all available tools in a predictable, data-driven, and transparent framework in line with its main objective of price stability. The Board will make its decisions with determination.
Details are coming...