Central Bank keeps policy rate unchanged: It had been raised eight times

Central Bank of the Republic of Turkey (TCMB) announced its interest rate decision. In line with expectations, TCMB kept the interest rate unchanged at 45% in February. During the first meeting of the Monetary Policy Committee (MPC) under the chairmanship of Fatih Karahan, the Central Bank ended the interest rate hike cycle, after eight meetings.

The decision statement of the Central Bank noted that inflation increased as forecasted in January, stating, "Rigidity in service prices, geopolitical risks, and food prices continue to exert inflationary pressures."

The statement also highlighted that "in case of a significant and lasting deterioration in the inflation outlook, the monetary policy stance will be tightened."

Eight consecutive interest rate hikes by previous Governor

The Central Bank had initiated an interest rate hike cycle in June 2023. In the following 8 meetings, TCMB raised the policy rate from 8.5% to 45%.

In February 2024, Fatih Karahan, who was the Vice Governor, was appointed as the Governor of the Central Bank of the Republic of Turkey, replacing Gaye Erkan. 

The Central Bank had previously made its highest policy rate increase of 850 basis points in May 2018. (PE)