Turkey’s Central Bank keeps policy rate constant

* Photo: Anadolu Agency (AA) - File

The Monetary Policy Committee of Turkey's Central Bank has decided to keep the policy rate (one-week repo auction rate) constant at 14 percent following its meeting at 2 pm today (February 17).

Chaired by Central Bank Governor Şahap Kavcıoğlu, the Monetary Policy Committee (MPC) released a statement after its meeting.

The Bank has explained its decision briefly as follows:

"Increase in inflation in the recent period has been driven by pricing formations that are not supported by economic fundamentals, supply side factors such as the rise in global energy, food and agricultural commodity prices, supply constraints, and demand developments.

"The Committee expects the 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.

"Accordingly, the Committee has decided to keep the policy rate unchanged."

Medium-term inflation target: 5 percent

The Bank has reiterated that "all available instruments will be decisively used within the framework of liraization strategy until strong indicators point to a permanent fall in inflation and the medium-term 5 percent target is achieved in pursuit of the primary objective of price stability."

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Other highlights from the Central Bank statement are as follows:

"The variants and increasing geopolitical risks keep the downside risks to global economic activity alive and increases the uncertainty.

"Recovery in global demand, high course of commodity prices, supply constraints in some sectors, particularly in energy, and high transportation costs have led to producer and consumer price increases internationally.

"The effects of high global inflation on inflation expectations and international financial markets are closely monitored.

"Moreover, central banks in advanced economies assess that the rise in inflation may last longer than previously anticipated due to rising energy prices and imbalances between supply and demand."

Central Bank's course of policy rate changes

In the period when Central Bank Governor Murat Çetinkaya was removed from office on July 6, 2019 and Murat Uysal was appointed in his place

In July 2019, from 24 percent to 19.75 percent
In September 2019, from 19.75 percent to 16.50 percent
In October 2019, from 16.50 percent to 14 percent
In December 2019, from 14 percent to 12 percent
In January 2020, from 12 percent to 11.25 percent
In February 2020, from 11.25 percent to 10.75 percent
In March 2020, from 10.75 percent to 9.75 percent
In April 2020, from 9.75 percent to 8.75 percent
In May 2020, from 8.75 percent to 8.25 percent
In September 2020, from 8.25 percent to 10.25 percent
In October 2020, from 10.25 percent to 15 percent

In the period when Murat Uysal was removed from office as the Central Bank Governor and Naci Ağbal was appointed in his place

In December 2020, from 15 percent to 17 percent
In March 2021, from 17 percent to 19 percent

In the period when Naci Ağbal was removed from office on March 20, 2021 and Şahap Kavcıoğlu was appointed in his place

In September 2021, from 19 percent to 18 percent
In October 2021, from 18 percent to 16 percent
In November 2021, from 16 percent to 15 percent
In December 2021, from 15 percent to 14 percent

* In the months that are not indicated in this table, the policy rate was kept unchanged (The Monetary Policy Committee of the Central Bank convenes every month).

(SD)

Turkey’s Central Bank keeps policy rate constant

İstanbul

Medium-term inflation target: 5 percent

Central Bank's course of policy rate changes