Turkish central bank keeps 50 pct interest rate unchanged for eighth time

The Central Bank of Turkey kept its interest rate steady at 50 percent in November, marking the eighth consecutive decision to hold the rate unchanged.

Thursday November 21 2024 02:56 pm

Duvar English

Turkey's Central Bank on Nov. 21 decided to keep the policy interest rate at 50 percent, highlighting that the risk of inflation expectation and pricing behavior to the disinflation process has not disappeared yet.

MPC Decision of November 21, 2024: https://t.co/xGVBNYeWyd pic.twitter.com/pstIA9RmnH
— CentralBankofTürkiye (@CentralBank_TR) November 21, 2024

In a statement, the bank said the inflation is in a declining trend and it would hold on its tight monetary policy which will decrease inflation further "through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations."

"The tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed," it said.

"Taking into account the lagged effects of monetary tightening, the Committee will make its policy decisions so as to create the monetary and financial conditions necessary to ensure a decline in the underlying trend of inflation," it added.

The bank also reiterated its medium-term inflation target of five percent.

Turkey's official statistics institution reported a monthly inflation rate of 2.88 percent in October, with the annual inflation rate dropping to 48.58 percent.

In an effort to control inflation crisis after the last elections, the economy administartion led by Treasury and Finance Minister Mehmet Şimşek adopted a U-turn and began to apply rate hikes.

Following the presidential elections in May 2023, the Central Bank raised the interest rate by a total of 4,150 basis points until March 2024. The last increase occurred in March when the policy rate was set at 50 percent, and it has remained unchanged for the past eighth months.