Central Bank announced its interest rate decision! What is the percentage of the policy interest? Here are the latest interest rates

The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Board met today under the chairmanship of Central Bank Governor Fatih Karahan.

After the meeting, the interest rate decision, which the markets eagerly awaited, was announced at 14:00.

THERE WAS AN INCREASE OF 500 BASIS POINTS

The Monetary Policy Committee (Board) decided to increase the one-week repo auction interest rate, which is the policy rate, from 45 percent to 50 percent.

The Board also made changes to the operational framework and decided that the Central Bank’s overnight borrowing and lending rates will be determined with a margin of -/+ 300 basis points compared to the one-week repo auction interest rate.

At its meeting held on February 22, the Board decided to keep the interest rate constant at 45 percent.

The main trend of monthly inflation in February was higher than expected, led by services inflation. While imports of consumer goods and gold slowed down, contributing to the improvement in the current account balance, other indicators for the near term point to a continuing resilient course in domestic demand. The rigidity in services inflation, inflation expectations, geopolitical risks and food prices keep inflation pressures alive. The Board closely monitors the compliance of inflation expectations and pricing behavior with forecasts and the effects of wage increases on inflation.

IF INFLATION IS DETERMINED, MONETARY POLICY WILL BE TIGHTENED

The Board decided to increase the policy rate, taking into account the deterioration in the inflation outlook. The tight monetary policy stance will be maintained until a significant and permanent decline in the underlying trend of monthly inflation is achieved and inflation expectations converge to the predicted forecast range. If a significant and permanent deterioration in inflation is predicted, the monetary policy stance will be tightened. Determined stance in monetary policy; It will reduce the main trend of monthly inflation through balancing in domestic demand, real appreciation in the Turkish lira and improvement in inflation expectations, and disinflation will be established in the second half of 2024.

TOOLS WILL BE USED EFFECTIVELY

The Board continues to implement macroprudential policies in a way that protects the functionality of the market mechanism and macro financial stability. In this context, financial conditions were tightened and monetary policy transmission was supported with the regulations made during the month. In case of unforeseen developments in loan growth and deposit interest, the monetary transmission mechanism will continue to be supported. Liquidity developments will be closely monitored and sterilization tools will be used effectively when necessary.

Indicators regarding inflation and its main trend will be closely monitored and the Board will resolutely use all the tools at its disposal in line with the main goal of price stability.

The Board will make its decisions in a predictable, data-driven and transparent framework.