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Central Bank Does Not Change Interest Rate Due to Risk in Price Stability

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The Central Bank of the Republic of Turkey (TCMB) Monetary Policy Committee convened under the chairpersonship of Murat Çetinkaya today (December 13).

Releasing a statement after the meeting, the committee announced that “the one-week repo rate, which is also called the political interest rate, has been kept fixed at its current level of 24 percent.”

In its meeting dated September 13, 2018, Central Bank increased the one-week-repo rate from 17.75 to 24 percent.

Having participated in the surveys conducted ahead of today’s meeting, economists also expected that the Central Bank would not make any changes in the political interest rate.

The Committee has listed the reasons for its decision as follows:

There are still risks in price stability

“Though there has been a certain amount of recovery in inflation outlook, depending on the imported input costs and developments in domestic demand, the risks in terms of price stability have still been continuing.

“Within this framework, until an evident improvement in inflation outlook, the committee has agreed to maintain its tight stance in monetary policy.

Slowdown in economic activities

“The recently announced data have been indicating that the tendency towards economic balancing has become evident.

“Though the foreign demand has been keeping its strength, the slowdown in the economic activities has been continuing as a result of the tightening in the financial conditions.”

The statement has also emphasized that an additional monetary tightening can be introduced if needs be. (HK/SD)