Excerpt from the statement by the Monetary Policy Board:
Recent data confirm that the rebalancing between the domestic and external demand continues as envisaged. Domestic demand follows a moderate pace, while exports continue to increase despite the weakening global outlook. Overall, aggregate demand conditions support disinflation and current account deficit continues to decline gradually. The Committee expects that year-end inflation will be lower than the forecast presented at the October Inflation Report, owing to the favorable course of unprocessed food prices. However, indirect effects of recent increases in administered and energy prices are closely monitored in terms of medium term inflation outlook. Although recent developments have improved the risk appetite towards Turkish economy, ongoing uncertainties regarding the global economy necessitate the monetary policy to remain flexible in both directions. Therefore, the impact of the measures undertaken on credit, domestic demand, and inflation expectations will be monitored closely and the funding amount will be adjusted in either direction, as needed. If deemed necessary for financial stability, a measured cut may be considered in the policy rate and the overnight borrowing rate in the forthcoming period. It should be emphasized that any new data or information may lead the Committee to revise its stance.