Turkey Monetary Policy


Central Bank keeps rates unchanged

At its 23 October monetary policy meeting, the Central Bank of the Republic of Turkey (CBRT) decided to maintain the one-week repo rate at 4.50%, a decision that was in line with market expectations. The Bank also maintained the overnight borrowing rate at 3.50% and the overnight lending rate for non-primary dealers at 7.75% (primary dealers: unchanged at 6.75%).

In its statement, the Central Bank stated that domestic demand continues to grow at a moderate pace and that the present policy framework is contributing to improve the current account deficit. Although inflation is expected to decline further in the months ahead, the CBRT pointed out that recent exchange rate volatility poses upside risks to the inflation outlook. In addition, the Monetary Policy Committee maintained its tone, stating that its current cautious stance - which may include additional monetary tightening - will remain in place until inflation returns to the Bank's medium-term target.

FocusEconomics Consensus Forecast panelists see the one-week repo rate ending the year at 4.64%. For 2014, the panel expects the rate to rise to 5.43%.

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Turkey Monetary Policy Chart

Turkey Monetary Policy October 2013

Note: 1-week repo rate in %, from 25 May 2010 onwards. From January 2008 until 25 May 2010, data refer to overnight borrowing rate.
Source: Central Bank of the Republic of Turkey (CBRT).

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