Turkiye’s central bank maintains policy rate at 9% amid inflation
“Leading indicators point to the continuation of recession concerns in developed economies as a result of ongoing geopolitical risks and interest rate hikes. The high level of energy prices and the likelihood of a recession in main trade partners keep the risks on current account balance alive,” the CBRT said in a press release on interest rates.
Turkiye’s central bank has fixed its policy rate at 9 per cent, which ended a four-month interest-rate cutting cycle in spite of a rise in inflation. The CBRT slashed interest rates by 500 basis points from August to November 2022. The country reflected an inflation rate of 84.4 per cent in November 2022, a decrease from the 85.5 per cent jump in October.
The country reflected an inflation rate of 84.4 per cent in November 2022, which was a decrease from the 85.5 per cent jump in October—the first drop in the annual inflation rate since May 2021, as per local media reports.
The rate of credit growth and allocation of funds for real economic activity purposes are being closely monitored. The Monetary Policy Committee (MPC) will continue to use the tools supporting the effectiveness of the monetary transmission mechanism and the entire policy toolset, particularly funding channels, will be aligned with liraisation targets.
The MPC evaluated that the current policy rate is adequate after considering the increasing risks regarding global demand. The credit, collateral and liquidity policy actions, of which the review process is finalised, will continue to be applied to reinforce the effectiveness of the monetary policy transmission mechanism.
“The CBRT will continue to use all available instruments decisively within the framework of the liraisation strategy until strong indicators point to a permanent fall in inflation and the medium-term 5 per cent target is achieved in pursuit of the primary objective of price stability. Stability in the general price level will foster macroeconomic stability and financial stability through the fall in country risk premium, continuation of the reversal in currency substitution and the upward trend in foreign exchange reserves, and durable decline in financing costs,” added the release.
Fibre2Fashion News Desk (NB)
