(MENAFN) Turkey’s Central Bank announced on Thursday that it would maintain the benchmark one-week repo rate at 50 percent for the fourth consecutive meeting, a decision that aligns with market expectations. In a statement, the bank explained that this decision was influenced by the delayed effects of previous monetary tightening measures. The Monetary Policy Committee emphasized that it remains vigilant regarding inflation risks, despite opting to keep the policy rate unchanged.

The bank highlighted a significant decrease in the underlying trend of monthly inflation in June. However, it cautioned that a temporary rise in inflation is anticipated in July due to adjustments in administered prices and taxes, along with supply-side factors affecting unprocessed food prices. Nevertheless, the bank expects that this increase in underlying inflation will be relatively contained.

In June, Türkiye experienced a slowdown in its annual consumer inflation rate, which fell to 71.60 percent from a previous 18-month high of 75.45 percent in May. This decline was in line with the country’s economic management's expectations. On a monthly basis, the consumer price index rose by 1.64 percent in June, a decrease from the 3.37 percent increase recorded in May. Despite this slowdown, inflationary pressures remain present, driven by geopolitical uncertainties and rising prices for food and services.

The Central Bank underscored the importance of closely monitoring inflation indicators and the underlying inflation trend. It affirmed the Committee’s commitment to using all available tools to achieve its primary goal of price stability. The bank reiterated its readiness to take decisive action to address inflationary pressures and ensure economic stability in the face of ongoing challenges.

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