The Central Bank of the Republic of Turkey, led by Fatih Karahan, has decided to keep its main interest rate steady for the eighth consecutive session. On Thursday, the bank confirmed that the one-week repo auction rate will remain at 50.00 percent, maintaining a level that has been consistent since March.
In a statement, the bank emphasized, "A tight monetary stance will persist until there is a notable and continuous drop in the fundamental trend of monthly inflation, and inflation forecasts realign with the targeted range." This policy rate is set to ensure the monetary conditions necessary to support the anticipated disinflation trajectory, balancing both current and expected inflation rates.
In October, Turkey saw inflation ease to its lowest point in 15 months, although it still stays significantly high, registering at 48.58 percent, a slight decrease from 49.38 percent in September.
Commenting on the bank's approach, Nicholas Farr, an economist at Capital Economics, noted that the latest statement suggests potential movement towards an easing cycle may be on the horizon. However, he cautions that the process of disinflation will likely decelerate in the coming months, and any reduction in interest rates is not expected until at least the end of the first quarter.
