Turkish Central Bank keeps interest rates constant

Policy rate, also known as one-week repo rate, stays at 8.25%

The Turkish Central Bank on Thursday kept its one-week repo rate unchanged at 8.25%.

A statement from the bank’s sixth meeting of the Monetary Policy Committee (MPC) said the bank decided to keep the one-week repo auction rate constant at 8.25%.

The statement further said: “As developments regarding the spread of the coronavirus substantially weakened global growth in the second quarter, normalization steps taken by several countries have contributed to a partial recovery.”

It stressed that central banks continue to take expansionary measures while uncertainties remain high on the global economy.

“The pandemic disease is closely monitored for its evolving global impact on capital flows, financial conditions, international trade and commodity prices,” it added.

It also said with the normalization steps as of May, economic recovery has started and noted that it is important to ensure the healthy functioning of financial markets, the credit channel and firms’ cash flows.

“In this respect, recent monetary and fiscal measures contribute to financial stability and economic recovery by supporting the potential output of the economy,” it underlined.

Touching on decreasing exports and tourism revenues, it recalled that exports recovered in the ongoing normalization process.

In May,the Central Bank cut its interest rate 50 basis points to 8.75% from 9.25%.

Since the beginning of this year, the bank has cut the rate 375 basis points.

In 2019, the bank cut the rate gradually by 1,200 basis points to 12% from 24%.

An Anadolu Agency survey, with a participation of 20 economists, on Tuesday forecast 25 basis points drop in one-week repo rate.

The Turkish Central Bank scheduled 12 MPC meetings for 2020.

Anadolu Agency

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