(MENAFN) On Thursday, the Turkish Central Bank opted to maintain the policy interest rate at 50 percent, a decision that aligned with market forecasts.
The bank emphasized that while there had been a continued decrease, the underlying trajectory of monthly inflation remained higher than anticipated.
"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 further mentioned.
The Turkish Central Bank provided a comprehensive assessment of the factors influencing inflationary pressures in its recent announcement. Notably, it underscored the persistent challenges posed by the elevated level and resilience of services inflation, alongside ongoing geopolitical risks and fluctuations in food prices. These elements collectively contribute to the enduring inflationary environment that the bank continues to navigate.
Reflecting on its decision to raise the interest rate to 50 percent in March, the Central Bank emphasized the significant impact this move had on tightening financial conditions. Despite maintaining the policy rate unchanged in the current announcement, the bank reiterated its steadfast attention to inflation risks and its commitment to taking necessary measures to address them.
Looking ahead, the bank expressed cautious optimism regarding the potential for a gradual moderation in inflationary pressures as the year progresses. Specifically, it anticipates that the disinflationary process may take hold during the second half of 2024, signaling a potential easing of inflationary strains over time.
In the context of market expectations, a recent survey conducted by a Turkish news agency revealed that economists had anticipated the Central Bank to maintain its policy rate unchanged, underscoring the alignment between market forecasts and the bank's decision-making process.
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