The Central Bank of the Republic of Türkiye (CBRT) left the policy rate constant at 37 percent. On the other hand, it kept the overnight lending interest rate at 40 percent and the borrowing interest rate at 35.5 percent.
The Central Bank kept the policy rate constant in March. Thus, in the shadow of the war, he left the interest rate constant in the second decision.
The Central Bank pointed out that inflation will rise slightly in April. It was stated that high volatility was observed in energy prices due to geopolitical developments.
Drawing attention to recent developments, the board said, “In case of a significant and permanent deterioration in the inflation outlook, the monetary policy stance will be tightened.” gave his message.
It was stated that if there is a development beyond the predictions of the credit and deposit markets, the monetary transmission mechanism will be supported with additional steps.
The CBRT’s Monetary Policy Committee text 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 37 percent. The Board also kept the Central Bank’s overnight lending interest rate at 40 percent and its overnight borrowing interest rate at 35.5 percent.
The main trend of inflation decreased in March. Preliminary data indicate that the main trend will increase slightly in April. As a result of the uncertainties associated with geopolitical developments, high trends and significant volatility are observed in energy prices. These developments and the effects of domestic energy prices on the inflation outlook through the cost channel and economic activity are closely monitored. While indicators point to a slowdown in economic activity, the possible secondary effects of recent developments on the inflation outlook will be important.
The tight monetary policy stance that will be maintained until price stability is achieved will strengthen the disinflation process through demand, exchange rate and expectation channels. The steps to be taken by the Board regarding the policy rate; It will determine inflation realizations, taking into account its main trend and expectations, in line with the intermediate targets and in a way that will ensure the stringency required by disinflation. Monetary policy decisions are taken with an inflation outlook-focused, meeting-based and cautious approach. With the influence of recent developments, in case of a significant and permanent deterioration in the inflation outlook, the monetary policy stance will be tightened. The Board emphasized its cautious stance against upside risks to inflation.
In case of unforeseen developments in the credit and deposit markets, the monetary transmission mechanism will be supported by additional macroprudential steps. Liquidity conditions will continue to be closely monitored and liquidity management tools will continue to be used effectively.
The Board will determine policy decisions to ensure monetary and financial conditions that will enable inflation to reach the 5 percent target in the medium term. “The Board will make its decisions within a predictable, data-driven and transparent framework.”
