Despite ongoing decline, underlying trend of monthly inflation higher than expected, bank says
The Turkish Central Bank held the policy interest rate constant at 50% on Thursday, in line with market expectations.
The bank stressed that despite an ongoing decline, the underlying trend of monthly inflation was higher than expected.
“While imports of consumption goods and gold contribute to the improvement in the current account balance, other recent indicators imply that domestic demand remains resilient,” it added.
It noted that in addition to the high level and the stickiness of services inflation, inflation forecasts, geopolitical risks, and food prices keep inflationary pressures alive.
Mentioning its interest rate hike in March to 50%,the bank said the monetary policy decisions last month led to a significant tightening in financial conditions.
It added that the bank kept the rate unchanged, but reiterated that it remains highly attentive to inflation risks.
The bank expected the disinflation process to be established in the second half of 2024.
Last week, an Anadolu survey showed that economists had expected the Turkish Central Bank to keep its policy rate constant.
Source: aa