Türkiye to maintain tight monetary policy to achieve 5% inflation target: CBRT
File photo shows entrance of Central Bank of Republic of Türkiye (CBRT) headquarters in Ankara, Türkiye. (AA Photo)
The Central Bank of the Republic of Türkiye (CBRT) stated that the level of monetary tightening required for the permanent establishment of price stability will be maintained as long as necessary to achieve the medium-term inflation target of 5%.
On Wednesday, the CBRT published its 2025 Monetary Policy, serving as a roadmap for the policies to be implemented in the upcoming year.
The policy document emphasized that ensuring price stability is the most significant contribution central banks can make to societal welfare, stating the CBRT’s primary objective as establishing and sustaining price stability.
The document also highlighted that all available tools would continue to be decisively employed in 2025 to strengthen disinflation strives. Additionally, financial stability will be considered a supportive element in the effort to maintain price stability.
‘FX-protected deposits will be terminated in 2025’
Key insights from the policy report are as follows:
- The one-week repo auction rate will remain the CBRT’s main policy tool.
- The Monetary Policy Committee (MPC) will hold eight meetings in 2025, based on a pre-announced schedule. The calendar for these meetings and reports will be published within five business days.
- Monetary policy decisions, along with brief justifications and their English translations, will be published at 2 p.m. (GMT+3) on the day of the MPC meetings. Detailed meeting summaries, including evaluations, will be released on the CBRT’s website within five business days after the meetings.
- The inflation report will be published four times a year. Informative meetings will continue to accompany the release of the report to ensure effective communication with the public regarding monetary policy practices.
- Simplification measures in these regulations will continue in 2025, and the FX-protected deposits—savings accounts that protect depositors against currency depreciation—scheme will be terminated. As of Dec. 20, 2024, the FX-protected deposits balance decreased by $34.2 billion, meanwhile, the share of Turkish lira deposits in total deposits rose to 58.6%, and the share of FX-protected deposits dropped to 6.2%.
- Credit growth and its composition will be managed to support the disinflation process and maintain macroeconomic balances.
