The Central Bank kept the interest rate at 50 percent.

The Monetary Policy Committee of the Central Bank of the Republic of Turkey (CBRT), chaired by Central Bank Governor Yaşar Fatih Karahan, convened. The Committee decided to keep the policy rate, which is the one-week repo auction interest rate, at 50 percent.

The announcement stated: "When the indicators regarding monthly inflation in August are examined as a whole, it is evaluated that the main trend has not undergone a significant change. The indicators for the third quarter confirm that domestic demand continues to slow down, reducing its inflationary impact. While core goods inflation continues to remain low with a limited increase, improvement in service inflation is expected to occur in the last quarter. The Committee noted that inflation expectations and pricing behaviors continue to pose a risk to the disinflation process.

"DISINFLATION PROCESS WILL STRENGTHEN"

The determined stance in monetary policy will reduce the main trend of monthly inflation and strengthen the disinflation process through the balance in domestic demand, real appreciation of the Turkish lira, and improvement in inflation expectations. While the Committee decided to keep the policy rate unchanged, it reiterated 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 targeted range. In case of a significant and permanent deterioration in inflation, monetary policy tools will be effectively used.

"STERILIZATION TOOLS WILL BE EFFECTIVELY USED"

If there are developments in credit and deposit markets beyond expectations, the monetary transmission mechanism will be supported with additional macroprudential steps. Liquidity conditions are closely monitored considering possible developments. Sterilization tools will continue to be effectively used.

Taking into account the delayed effects of monetary tightening, the Committee will determine the monetary and financial conditions that will reduce the main trend of inflation and achieve the 5 percent inflation target in the medium term. Indicators regarding inflation and the main trend of inflation will be closely monitored, and the Committee will use all available tools in a determined manner in line with the main objective of price stability. The Committee will make its decisions in a predictable, data-driven, and transparent framework."