Turkish Central Bank expected to keep rates on hold

ANKARA

Turkey’s Central Bank is expected to keep interest rates steady this week, according to a state-run Anadolu Agency survey released on June 10.

The Monetary Policy Committee (MPC) is set to meet today for the fourth time in 2019 to announce the bank’s decision about interest rates.

Among 20 economists surveyed by Anadolu Agency, four economists expect a decline in interest rates, varying between 0.50 percentage points and 1.50 percentage points.

In April, the Central Bank kept its one-week repo rate - also known as the bank’s policy rate - constant at 24 percent.

Including today’s meeting, the bank will hold five more MPC meetings this year.

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

In the statement released after the last MPC meeting held on April 25, the bank said that the rebalancing trend in the economy continues.

“While a partial recovery is observed in economic activity compared to the previous quarter, the contribution of aggregate demand conditions to disinflation continues. The recent rise in financial volatility and risk premium indicators increases the downside risks to the domestic demand outlook.”

The bank also noted that the current account balance is expected to maintain its improving trend in the upcoming period.

“The Central Bank will continue to use all available instruments in pursuit of the price stability objective. Factors affecting inflation will be closely monitored and monetary stance will be determined to keep inflation in line with the targeted path,” it said.

The bank also stressed that any new data or information may lead the committee to revise its stance.