Central Bank of Türkiye Holds Repo Rate at 50.00% as Monetary Tightening Transmits Through Economy

The Central Bank of the Republic of Türkiye held its one-week repo rate at 50.00% at its May 2024 monetary policy meeting, keeping its tightening cycle on hold for a second consecutive meeting. Consumer price inflation stood at 69.8% in April 2024.

The Monetary Policy Committee cited the lagged effects of monetary tightening.

POLICY BACKGROUND

Since the middle of 2023, Türkiye's central bank has moved away from the low-interest-rate approach it had pursued for an extended period and raised rates in a sequence of increases. The policy rate was increased at successive meetings, rising to 50.00%.

The committee said additional steps would be taken in light of recent developments in credit growth and deposits. The committee said disinflation would be established in the second half of the year and that it would make its decisions in a predictable, data-driven and transparent framework.

POLICY GUIDANCE

The committee has signalled that it will maintain the current restrictive monetary stance for as long as is necessary to achieve a lasting improvement in the inflation outlook, until a significant and sustained decline in the underlying trend of monthly inflation is observed and inflation expectations converge to the projected forecast range.