The Monetary Policy Committee (PPK) meeting was held under the chairmanship of CBRT Governor Fatih Karahan. With the decision taken, the overnight lending interest rate was increased from 46% to 49% and the overnight borrowing interest rate was increased from 41% to 44.5%.
In the statement released by CBRT, it was stated that the underlying trend of inflation declined in March, while a limited increase in core goods inflation is expected in April due to financial developments. Services inflation is expected to remain relatively flat.
The Central Bank pointed out that domestic demand remained higher than expected in the first quarter of the year, which had a limited impact on disinflation. Moreover, it was emphasized that the effects of increasing protectionism in global trade on the disinflation process through commodity prices and capital flows are closely monitored.
“The decisive stance in monetary policy supports the disinflation process with the rebalancing in domestic demand, the real appreciation of the Turkish lira and the improvement in inflation expectations. Further coordination of fiscal policy will also contribute to this process.”
CBRT stated that the tight monetary policy will continue until inflation falls permanently and that monetary policy decisions will continue to be taken in a meeting-based and prudent manner according to the inflation outlook.
Following the recent developments in financial markets, additional steps to support the monetary transmission mechanism were also taken and liquidity management tools will be used effectively.
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