At an interim meeting on 4 August, the Monetary Policy Committee (MPC) unexpectedly slashed the 1-week repo rate by 50 basis points from 6.25% to 5.75%, which represents the lowest interest rate since the country adopted an inflation targeting policy in 2002. In addition, the Committee decided to narrow the overnight interest rate corridor with a 350 basis point hike in the overnight lending rate to 5.0% and decided to provide foreign exchange liquidity to the market, through foreign exchange selling auctions on the days deemed necessary to offset pressure on the lira. Although the decision was unexpected, the CBRT had already hinted at the possibility of cutting the repo rate at a previous MPC meeting on 21 July. While leaving the repo rate unchanged at the time, the CBRT had in fact declared that it would shift to monetary loosening if European sovereign debt problems intensify and domestic activity grinds into recession. Previously, the CBRT had already taken pre-emptive action against the continued depreciation of the Turkish currency on 25 July, when it announced an unexpected cut in long-term commercial banks' reserve requirement ratio (RRR) for foreign currency deposits.
Turkey Monetary Policy
Central Bank cuts rates amid slowing economic activity
August 4, 2011
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Turkey Economic News
October 21, 2016
The consumer confidence index, published by the Statistical Institute in cooperation with the Central Bank, decreased slightly from 74.3 in September to 74.0 in October.
October 20, 2016
At its 20 October monetary policy meeting, the Central Bank of the Republic of Turkey (CBRT) decided to keep the marginal funding rate unchanged at 8.25%.
October 13, 2016
The current account balance recorded a USD 1.8 billion deficit in August (July: USD 2.7 billion deficit).
October 10, 2016
In August, industrial production expanded a calendar-adjusted 2.2% compared to the same month last year.
October 3, 2016
The Manufacturing Purchasing Managers’ Index (PMI), produced by the Istanbul Chamber of Industry (ICI) and IHS Markit, increased slightly to 48.3 in September from August’s 47.0, which had marked a multi-year low.