Turkey Monetary Policy


Central Bank remains on hold

At its 27 March meeting, the Central Bank of the Republic of Turkey (CBRT) left the one-week policy rate unchanged at 5.75%, as was expected by the market. The Central Bank also held the overnight borrowing rate steady at 5.00%, and left the overnight lending rate at 11.50% (11.00% for primary dealers). According to the Bank, recent data confirm that a rebalancing process between external and domestic demand continues and therefore the current account balance is expected to continue to improve. Monetary authorities explained that inflation developments are in line with the projected path, while adding that a recent round of monetary tightening has been implemented in order to curb inflation expectations. The Bank stated that ?factors affecting inflation will be closely monitored and additional monetary tightening will be repeated when necessary?. The Central Bank also reiterated that ?given the prevailing uncertainties of the global economy, it would be appropriate to preserve the flexibility of the monetary policy? and that ?the impact of the measures undertaken on credit, domestic demand and inflation expectations will be monitored closely?.


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