Turkey Holds Key Interest Rate at 24%

The Central Bank of Turkey held its one week repo auction rate at 24 percent on January 16th as widely expected, saying risks on price stability continue to prevail although there was some improvement in the inflation outlook. The country's annual inflation rate fell to a four-month low of 20.3 percent in December, still way above the central bank's midpoint target of 5 percent.

Statement by the Central Bank of the Republic of Turkey:

Recently released data show that rebalancing trend in the economy has become more noticeable. External demand maintains its strength while slowdown in economic activity continues, partly due to tight financial conditions. Current account balance is expected to maintain its improving trend.

While developments in import prices and domestic demand conditions have led to some improvement in the inflation outlook, risks on price stability continue to prevail. Accordingly, the Committee has decided to maintain the tight monetary policy stance until inflation outlook displays a significant improvement.

The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered.

It should be emphasized that any new data or information may lead the Committee to revise its stance.

Turkey Holds Key Interest Rate at 24%

Central Bank of Turkey | Joana Ferreira | joana.ferreira@tradingeconomics.com
1/16/2019 11:13:36 AM