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Turkish Central Bank Holds Rate Steady For Sixth Session

Turkey’s central bank left its key interest rate unchanged for a sixth consecutive policy session on Wednesday, after it dropped its hawkish stance in April and tightened reserve requirement in May.

The Monetary Policy Committee, led by Governor Murat Cetinkaya, kept the policy rate, which is the one-week repo auction rate, unchanged at 24 percent. The decision was in line with economists’ expectations.

The previous change in the rate was a massive hike in September last year.

“Factors affecting inflation will be closely monitored and, monetary stance will be determined to keep inflation in line with the targeted path,” the bank said.

“It should be emphasized that any new data or information may lead the Committee to revise its stance,” the TCMB added.

In April, the bank dropped its earlier pledge that “further monetary tightening will be delivered” from its forward guidance, thus signaling a dovish shift.

The bank decided to maintain the tight monetary policy stance to contain the risks to the pricing behavior and to reinforce the disinflation process.

Citing the recent data, the central bank said that rebalancing trend in the economy has continued.

The economic activity is sluggish, thanks partly to tightened financial conditions, while external demand is displaying relative strength, the bank added.

The TCMB expects the current account balance to maintain its improving trend.

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