Turkish central bank maintains interest rate at 50%

The Central Bank of the Republic of Türkiye (CBRT) has announced its interest rate decision for June, keeping the policy rate unchanged at 50% for the sixth consecutive month.

The Monetary Policy Committee decided to maintain the one-week repo auction rate, which serves as the policy rate, at 50%.

Since June 2023, the CBRT has implemented a cumulative increase of 4,150 basis points. The interest rate has risen from 8.5% in June 2023 to 50% in March 2024, with the following increases:

• June 2023: 8.5% to 15% (up 650 basis points)
• July 2023: 15% to 17.5% (up 250 basis points)
• August 2023: 17.5% to 25% (up 750 basis points)
• September 2023: 25% to 30% (up 500 basis points)
• October 2023: 30% to 35% (up 500 basis points)
• November 2023: 35% to 40% (up 500 basis points)
• December 2023: 40% to 42.5% (up 250 basis points)
• January 2024: 42.5% to 45% (up 250 basis points)
• March 2024: 45% to 50% (up 500 basis points)

The committee continues to monitor the effects of monetary tightening on loans and domestic demand. Despite maintaining the policy rate, the committee remains cautious regarding inflation risks due to the delayed effects of monetary policy changes.

The CBRT will sustain a tight monetary policy stance until there is a clear and sustained decrease in the core inflation trend and inflation expectations align with the projected range. If inflation deteriorates significantly and persistently, further tightening of the monetary policy may be implemented.