The Central Bank of Turkey kept its one-week repo rate – also known as the policy rate – constant at 14%, in line with market expectations.
In a statement, the bank pointed out that rising energy costs resulting from geopolitical developments, temporary effects of pricing formation and strong negative supply shocks have pushed the inflation upward.
‘Sustainable price and financial stability’
“The Committee expects disinflation process to start on the back of measures taken and decisively pursued for sustainable price and financial stability along with the decline in inflation owing to the base effect and the resolution of the ongoing regional conflict. Accordingly, the Committee has decided to keep the policy rate unchanged,” it said in a statement.
Turkey’s annual consumer inflation hit a 20-year high in March at 61.14%.
The Central Bank also kept the policy rate constant in its previous three meetings this year after cutting it by 100 basis points from 15% to 14% in December 2021.
The Central Bank stressed that in a bid to create an institutional basis for sustainable price stability, the comprehensive review of the policy framework continues with the aim of encouraging permanent and strengthened “liraization” in all policy tools of the bank.