Türkiye’s central bank holds repo rate at 50% amid persistent inflation risks
A logo of Turkey's Central Bank is pictured at the entrance to its headquarters in Ankara, Türkiye February 8, 2024. (Reuters Photo)
Türkiye’s central bank announced Tuesday that it will keep the benchmark one-week repo rate unchanged at 50% for the fourth consecutive meeting, aligning with market expectations.
“Considering the lagged effects of the monetary tightening, the (Monetary Policy) Committee decided to keep the policy rate unchanged but reiterated that it remains highly attentive to inflation risks,” the bank stated.
The central bank highlighted a notable decrease in the underlying trend of monthly inflation in June, but anticipated a temporary rise in July because of adjustments in administered prices and taxes, along with supply-side factors affecting unprocessed food prices.
“However, the rise in the underlying inflation is expected to be relatively limited,” the statement added.
Türkiye’s annual consumer inflation rate slowed to 71.60% in June, down from an 18-month high of 75.45% in May, as anticipated by the country’s economic management.
On a monthly basis, the consumer price index increased by 1.64% in June, a decrease from May’s 3.37% rise.
The central bank emphasized that despite this slowdown, inflationary pressures persist amid geopolitical uncertainties and higher prices for food and services.
“Indicators of inflation and the underlying trend of inflation will be closely monitored, and the Committee will decisively use all the tools at its disposal in line with its main objective of price stability,” the bank concluded.
