Central Bank will meet for rate decision this week

ISTANBUL

Members of the Central Bank’s Monetary Policy Committee will meet on July 23 to decide about the key interest rate.

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

As part of its effort to bring rampant inflation under control, the central bank's hiked interest rates, from 8.5 percent to 50 percent since June 2023.

In the statement accompanying its decision to keep the rate unchanged last month, the bank said that it remains highly attentive to inflation risks.

“The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range,” it said at the time.

In case of unanticipated developments in credit and deposit markets, monetary transmission mechanism will be supported via additional macroprudential measures, it stressed.

On July 20, the bank announced additional steps to support the tight monetary policy stance.

The monthly growth limit for FX loans were lowered from 2 percent to 1.5 percent, while the monthly growth limits for Turkish Lira loans were kept unchanged at 2 percent, the bank said in a statement.

“Moreover, the scope of the exemption for investment loans has been expanded and it has been decided to exempt investment loans extended in the scope of the funding provided by international development finance institutions from the growth limits for lira and foreign currency loans,” it added.