Turkish central bank holds rates at 50% as expected
2024.07.23 07:27
ISTANBUL (Reuters) – Turkey’s central bank held its policy interest rate steady at 50% on Tuesday as expected and repeated it remains highly attentive to inflation risks even as it expects disinflation to gain strength.
The bank last raised the rate in March, by 500 basis points, citing a deterioration in the inflation outlook, and has since held steady while vowing to tighten policy more if the outlook worsens, a pledge it repeated on Tuesday.
Since June last year, the bank has raised its policy rate by a total 4,150 basis points in a tightening cycle that reversed years of monetary stimulus supported by President Tayyip Erdogan to boost economic growth.
Turkey’s annual inflation rate began what is expected to be a sustained fall in June, dipping to 71.6%. Officials and analysts predict a gradual decline in the remainder of 2024 with economists forecasting a year-end level of around 43%.
In a Reuters poll last week, all 26 economists expected the bank to hold rates this month and to not ease until the next quarter. The policy rate was expected to drop by 500 basis points to 45% by the end of 2024.
