Interest Rate in Turkey
Turkey - Interest Rate
Central Bank aggressively tightens stance in March
At its 18 March meeting, the Monetary Policy Committee of the Central Bank of Turkey raised the one-week repo rate by 200 basis points from 17.00% to 19.00%. The decision followed two consecutive holds and came in above expectations of a softer 100 basis-point rate hike.
The decision to deliver a front-loaded and strong tightening of financial conditions reflected the Bank’s assessment that the recent upward trend in credit growth and rising import costs have lessened the impact of previous tightening on the inflation outlook. The increase in import costs is partly due to higher commodity prices amid the global recovery, as well as renewed pressure on the Turkish currency. Moreover, the Bank noted that elevated inflation expectations continue to adversely affect price-setting behavior. Regarding the economy, the Bank confirmed that “economic activity is on a strong course” thanks to the gradual easing of restrictive measures, while it also warned that risks to activity “remain significant”.
The Bank continued to strike a hawkish tone in the press release, reaffirming that “the tight monetary policy stance will be maintained […] for an extended period until strong indicators point to a permanent fall in inflation and price stability” and the inflation target of 5% is reached.
Last month, FocusEconomics panelists saw the one-week repo rate ending 2021 at 14.00% and 2022 at 11.33%. Panelists are currently taking into account the latest developments and a new Consensus Forecast report will be published on 15 April.
Turkey - Interest Rate Data
|Policy Interest Rate (%)||7.50||8.00||8.00||24.00||12.00|
5 years of economic forecasts for more than 30 economic indicators.
Turkey Interest Rate Chart
Source: Central Bank.
|Bond Yield||12.00||-0.09 %||Dec 31|
|Exchange Rate||5.95||-0.85 %||Jan 01|
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April 6, 2021
Consumer prices increased 1.08% from the previous month in March, picking up from February's 0.91% increase.
April 1, 2021
The Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) rose to 52.6 in March from 51.7 in February.
March 26, 2021
Business confidence in Turkey rose to a near three-year high 110.8 in March from 109.3 in February.
March 24, 2021
Consumer confidence rose to a multi-year high of 86.7 in March from 84.5 in February; however, the index remained markedly below the neutral 100-threshold that separates pessimism from optimism among consumers. The uptick was driven by a broad-based improvement with views on the current financial situation and the expected financial situation in the year ahead turning less downbeat, while attitudes towards the general economic situation over the next 12 months and likelihood of spending also improved.
March 18, 2021
At its 18 March meeting, the Monetary Policy Committee of the Central Bank of Turkey raised the one-week repo rate by 200 basis points from 17.00% to 19.00%.