(MENAFN- AzerNews) By News Centre
The Central bank Monetary Policy Board met for the first time
under the leadership of the new president, Fatih Karahan.
After the meeting, the interest rate decision, which the markets
were eagerly awaiting, was announced at 14:00.
The Policy Committee announced that it kept the policy rate
constant at 45 percent.
The bank increased interest rates by 250 basis points in its
last meeting.
The statement made by the Central Bank regarding the interest
rate decision is as follows:
The Monetary Policy Committee (Board) decided to keep the
one-week repo auction interest rate, which is the policy rate,
constant at 45 percent.
The main trend of monthly inflation in January was as a result
of time-dependent price and wage updates specific to the first
month of the year. Inflation increased as predicted in the forecast
path, and headline inflation recorded a limited increase. Recent
indicators indicate that the balancing of domestic demand
continues. The balancing process in question is strong in consumer
goods and gold imports, but slower than expected in other
consumption expenditure indicators. In addition, rigidity in
service prices, geopolitical risks, and food prices keep inflation
pressures alive. The Board will closely monitor the compliance of
inflation expectations and pricing behaviour with the forecasts and
the effects of wage increases on inflation.
External financing conditions, the level of reserves, the
improvement in the current account balance, and the demand for
Turkish lira assets continue to contribute to exchange rate
stability and the effectiveness of monetary policy. The determined
stance in monetary policy will continue to contribute to the real
appreciation process of the Turkish lira, which is one of the main
elements of disinflation.
The Board evaluated that the current level of the policy rate
will be maintained until a significant and permanent decline in the
underlying trend of monthly inflation is achieved and inflation
expectations converge to the anticipated forecast range. If a
significant and permanent deterioration in the inflation outlook is
anticipated, the monetary policy stance will be tightened.
The Board will continue to implement macroprudential policies in
a way that protects the functionality of the market mechanism and
macrofinancial stability. In this context, in the event of
developments other than anticipated in loan growth and deposit
interest, the monetary transmission mechanism will be supported. In
order to support monetary tightness, liquidity developments will be
closely monitored, and sterilisation tools will be used
effectively.
The Board will determine policy decisions in a way that will
provide monetary and financial conditions that will reduce the main
trend of inflation and reach the 5 percent target in the medium
term, taking into account the lagged effects of monetary
tightening.
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.
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