Turkey's Central Bank keeps policy rate unchanged

ANKARA

The Turkish Central Bank on Jan. 16 kept its one-week repo rate - also known as the policy rate - constant at 24 percent.

The decision came in a statement from the bank's Monetary Policy Committee (MPC) meeting, which is the first of eight meetings scheduled for the year.

“Recently released data show that rebalancing trend in the economy has become more noticeable. External demand maintains its strength while slowdown in economic activity continues, partly due to tight financial conditions. Current account balance is expected to maintain its improving trend,” the bank said.

Developments in import prices and domestic demand conditions have led to some improvement in the inflation outlook, the bank noted, but warned that risks on price stability continue to prevail.

The bank stressed that it will continue to use all available instruments in pursuit of the price stability objective.

“Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered,” it said.

Among 19 economists surveyed by Anadolu Agency on Jan. 14, only one economist expected a 150-base-point decline in one-week repo rate, while all the others foresaw no change in interest rates.

In 2018, the Turkish Central Bank held nine MPC meetings, as interest rates climbed from 8 percent to 24 percent over the course of the year.