Turkey Monetary Policy January 2019


Turkey: Central Bank keeps rates unchanged in January

January 16, 2019

At its monetary policy meeting on 16 January, the Central Bank of the Republic of Turkey (CBRT) left the one-week repo rate unchanged at 24.00% for the third consecutive meeting.

The Bank’s decision to keep rates at their current high level was motivated by a desire to ensure inflation remains on the downward trend observed since November. In its press release, the CBRT commented that “risks on price stability continue to prevail”, with inflation still running above 20%. As such, any premature monetary loosening would risk further stoking price pressures and causing the vulnerable lira to weaken. On the other hand, in light of subdued domestic demand and inflation which appears to have finally peaked, the Bank saw no need for further tightening.

In its communiqué, the Bank’s tone was unchanged from December’s meeting. As such, the CBRT reiterated its commitment to a tight monetary stance “until [the] inflation outlook displays a significant improvement”—taking into account fiscal policy, inflation expectations and the lagged impact of previous rate hikes—and left the door open to future rate hikes if required.

Turkey Interest Rate Forecast

Our panelists see the one-week repo rate ending 2019 at 19.49% and 2020 at 15.22%.

Author:, Economist

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Turkey Monetary Policy Chart

Turkey Monetary Policy January 2019 1

Note: One-week repo rate
Source: Central Bank of the Republic of Turkey (CBRT).

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