Türkiye’s central bank maintains policy interest rate at 50 percent
Date
11/21/2024 7:21:47 AM
(MENAFN) The Central bank of the Republic of Türkiye (CBRT) announced on Thursday that it would maintain its policy interest rate at 50 percent, marking the eighth consecutive decision to leave the rate unchanged. This decision followed the bank’s monetary policy committee meeting, where officials assessed current economic trends and inflationary pressures. By holding the policy rate steady, the CBRT aims to continue supporting its disinflationary objectives while monitoring the broader economic landscape.
In its statement, the bank highlighted a decline in the underlying inflation trend during October. Indicators for the final quarter of the year suggest that domestic demand has further moderated, reaching levels that align with disinflationary conditions. This reduction in demand is seen as a critical factor in the broader effort to manage inflation. The CBRT emphasized the importance of sustaining this trend to ensure longer-term economic stability and predictability.
While inflation in core goods remains relatively subdued, the bank noted growing signs of improvement in services inflation, which has historically been more challenging to control. However, the inflation rate for unprocessed food continues to be high, driven largely by temporary supply disruptions. These factors underscore the complexity of the inflationary landscape, with varying trends across different sectors of the economy.
The CBRT also addressed inflation expectations and pricing behavior, which, despite showing signs of improvement, still pose risks to the overall disinflation process. The annual consumer inflation rate in Türkiye dropped to 48.58 percent in October, representing the lowest level since July 2023. While this decline is encouraging, the central bank remains cautious about maintaining the disinflation momentum, given potential uncertainties in the economic environment.
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