The Monetary Policy Committee of the Central Bank of the Republic of Türkiye (TCMB) announced its eagerly awaited interest rate decision. The Committee decided to lower the one-week repo auction rate, which is the policy rate, from 46% to 43%.
Additionally, the Central Bank reduced the overnight lending rate from 49% to 46% and the overnight borrowing rate from 44.5% to 41.5%.
At the meeting, it was noted that the main trend in inflation remained flat in June and could temporarily increase in July due to month-specific factors. Recent data indicates that the disinflationary effect of demand conditions is increasing, while geopolitical developments and rising protectionism in global trade are being closely monitored for their potential impact on the disinflation process. It was emphasized that inflation expectations and pricing behavior pose risks to the disinflation process.
The Committee stated that it will maintain its tight monetary policy stance until price stability is achieved, and that demand balancing, real appreciation of the Turkish lira, and improvement in inflation expectations will support the disinflation process. It was also stated that fiscal policy will contribute to this process.
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