The Central Bank of the Republic of Turkey (CBRT) announced its interest rate decision following the meeting of the Monetary Policy Committee (MPC). The policy rate was raised from 45% to 50% with a 500 basis point increase.
The MPC also made changes to the operational framework by deciding to determine the Central Bank’s overnight borrowing and lending rates with a margin of +/- 300 basis points compared to the one-week repo auction interest rate.
According to the statement from the MPC, it was stated that “Considering the deterioration in the inflation outlook, the Committee has decided to increase the policy rate.”
The statement highlighted that in February, the main trend of monthly inflation, led by service inflation, exceeded expectations.
Furthermore, it was emphasized that the Central Bank will maintain its tight monetary policy stance until a significant and sustained decrease in the main trend of monthly inflation is achieved and inflation expectations converge to the targeted forecast range.
Other points emphasized in the statement include the Monetary Policy Committee’s commitment to using all available tools decisively in line with its primary objective of price stability, and making decisions within a predictable, data-driven, and transparent framework.
According to data from the Turkish Statistical Institute annual inflation in Turkey rose to 67.07% in February. However, according to the Inflation Research Group this rate is 121.98%.
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