Central Bank to meet for rate decision

ANKARA

The Central Bank’s Monetary Policy Committee is set to meet on Aug. 20 to decide about its key interest rate.

Most economists expect the bank to keep the policy rate, the one-week repo auction rate, unchanged at 50 percent.

However, the markets expect the bank to slash the policy rate down to 46.5 percent at the end of 2024.

Since June last year, the bank raised its policy rate by a total of 4,150 basis points to 50 percent, with the last hike taking place in March.

This month’s rate-decision meeting was originally scheduled for Aug. 22. But, it was rescheduled for Aug 20 as Governor Fatih Karahan will be attending the Jackson Hole Economic Policy Symposium.

Speaking at the presentation of the bank’s quarterly inflation report, Karahan vowed to maintain a cautious stance in monetary policy.

“We will maintain the tight monetary policy stance until a significant and sustained decline in the underlying trend of monthly inflation is achieved,” he said on Aug. 8, adding that the bank will continue to do whatever is necessary to bring inflation down in line with its intermediate targets.

In the last edition of the inflation report, the bank has its year-end inflation forecasts for 2024, 2025 and 2026 unchanged.

The bank projects that inflation will fall to 38 percent at the end of 2024, while its forecasts for 2025 and 2026 are 14 percent and 9 percent, respectively.